Open USD poses biggest threat yet to Circle's USDC, CoinShares says

Finance Open USD poses biggest threat yet to Circle's USDC, CoinShares says The consortium-backed stablecoin would share reserve income with partners instead of the issuer, pressuring Circle's margins if it debuts in 2026. By Will Canny , AI Boost | Edited by Sheldon Reback Jul 15, 2026, 2:03 p.m. 2 min read Make preferred on Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Make preferred on Open USD poses biggest threat yet to Circle's USDC, CoinShares says. (Circle) Summary Show CoinShares said Open USD directly challenges Circle by giving partners income generated by reserves backing the stablecoin, undermining USDC's distribution economics. Open USD comprises more than 140 companies, including BlackRock, Coinbase, Mastercard, Stripe and Visa. The stablecoin is expected to debut in the second half of 2026. Despite the threat, CoinShares said USDC’s established liquidity and integrations could prove difficult for any newcomer to replicate. Open USD, a bank-backed group developing a dollar-pegged stablecoin , is the most credible threat yet to Circle Internet's (CRCL) USDC because it targets the economics at the heart of the company’s business, crypto asset manager CoinShares said in a Monday report. Unlike traditional stablecoin issuers, who keep the income generated by their reserves, Open USD plans to distribute the yield to participating businesses, retaining only a management fee. CoinShares said the model could squeeze Circle's margins while raising the cost of maintaining USDC distribution. “If successful, Open USD could push stablecoins further into mainstream payments by making the economics and governance more attractive for the businesses actually using them,” wrote analyst Luke Nolan. Developed by Open Standard, the institutional-focused stablecoin is backed by a consortium of more than 140 companies, including BlackRock (BLK), Coinbase (COIN), Mastercard (MA), Stripe and Visa (V), and is targeting a second-half 2026 launch. Key details, including its reserve structure and fee model, remain undisclosed. The model also strengthens Coinbase's hand ahead of the Aug. 18 renewal of its revenue-sharing agreement with Circle, under which the exchange receives roughly half of USDC's reserve income, the report said. USDC's circulating supply has fallen to about $73 billion from nearly $80 billion in March, trimming its share of the roughly $312 billion stablecoin market as competition from newly regulated issuers intensifies. Circle shares fell more than 17% on the day Open USD was announced, though CoinShares said the decline was likely amplified by technical selling linked to the Russell index reconstitution. Still, the report argued the market may be overreacting. Open USD has yet to launch, important details remain unresolved and Circle retains a significant advantage through USDC's deep liquidity and years of integrations across exchanges, DeFi and payments. Open USD is unlikely to pose a major threat to Tether, whose dominance in emerging markets and offshore dollar liquidity gives USDT, the largest stablecoin by far, a different competitive moat, the report added. For now, investors should watch whether Circle changes its distribution strategy and whether Open USD can convert its high-profile backing into adoption, CoinShares said. Until then, the project remains a credible, but unproven, challenge to USDC. CoinShares is not alone in noting the challenge posed by Open USD. Japanese investment bank Mizuho downgraded Circle to underperform from neutral and slashed its price target to $50 from $85 in a note to clients on Tuesday, arguing that the new rival’s business model threatens the stablecoin issuer's long-term economics. Circle shares were 3.8% higher in early trading at $65.61. Read more: Mizuho downgrades Circle to underperform, cuts price target to $50 on Open USD threat Circle Stablecoins AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . Latest Crypto News 1 A timeline of the Ethereum Foundation's ongoing shakeup 44 minutes ago 2 BlackRock's crypto assets fall 39% despite $15 billion of net inflows 1 hour ago 3 The launchpad that fueled Robinhood Chain's memecoin boom just gave away all its revenue 1 hour ago 4 Japan reclassifies crypto as a financial asset, paves way for tax cuts 1 hour ago 5 Strategy feels 'very secure' until bitcoin reaches $8,000-$10,000, says CEO 2 hours ago 6 Bitcoin rally cools as investors digest inflation data, oil clouds outlook 2 hours ago 7 Crypto steadies as Middle East tensions counter U.S. inflation report boost 2 hours ago 8 Stripe mounts blockbuster $53 billion bid to buy PayPal 3 hours ago 9 Live markets: Bitcoin tops $65,000 as markets get more good inflation news 5 hours ago 10 UK plans first G7 digital sovereign bond by early 2027 5 hours ago Latest Research Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B. By CoinDesk Research Jul 13, 2026 CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B. Why it matters : CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B. View Full Report More From Finance The launchpad that fueled Robinhood Chain's memecoin boom just gave away all its revenue Stripe mounts blockbuster $53 billion bid to buy PayPal UK plans first G7 digital sovereign bond by early 2027