Open USD (OUSD): Analysis of the new stablecoin — a threat to USDC and USDT or just another hype?
The stablecoin market is bracing for a major shake-up. Enter Open USD (OUSD) — a project backed by a consortium of over 140 companies, including Stripe, Visa, Mastercard, BlackRock, and Coinbase. It is operated by Open Standard, with Zach Abrams, co-founder of Bridge (acquired by Stripe for $1.1 billion), appointed as interim CEO. The stated goal is to reshape the current landscape dominated by Tether (USDT) and Circle (USDC). The market reaction was immediate: Circle's shares (CRCL) plummeted 17.55% in a day and nearly 40.34% over the month.
What makes OUSD unique?
The key difference between OUSD and USDC or USDT lies in its economic model. Traditional issuers retain the interest income from the reserves backing the stablecoin. OUSD flips this logic. Almost all yield from the reserves, minus a small management fee, is returned to distributors — network participants. Furthermore, zero fees are claimed for token issuance and redemption. This is a direct blow to Circle's business model, which relies precisely on interest from its approximately $74 billion in reserves.
Why was Circle hit harder than Tether?
The blow to Circle was particularly painful for several reasons. First, the OUSD consortium includes key partners of Circle itself: BlackRock manages 80% of USDC reserves, and Coinbase is a co-founder of the project, receiving about $908 million annually for distribution. BNY Mellon's participation as a custodian bank only adds to the pressure. Effectively, competition has emerged from within Circle's own partner network.
Second, a technical factor came into play. During the annual Russell index rebalancing on June 26, 2026, Circle was excluded from five key growth indices, including the Russell 1000 Growth and Russell 3000 Growth. Index funds and ETFs are forced to mechanically sell CRCL shares, creating additional supply regardless of fundamental performance. The combination of this factor with increased competition triggered such a sharp decline.
Can OUSD be called a "killer" of USDC and USDT?
For now, this label seems premature. Circle CEO Jeremy Allaire believes the market is large enough for several major players. He cites data from Artemis: in the first quarter of 2026, USDC processed approximately $30 trillion in on-chain transactions, accounting for 80% of all dollar stablecoin operations. USDT accounted for 20%, and all others combined for less than 0.5%.
Allaire challenges three key advantages of OUSD. Zero redemption fees, in his view, clash with market reality: a stablecoin with strong redemption infrastructure and no fees becomes a free option for competitors. He considers the full income distribution model a recipe for chronic underinvestment in infrastructure. He also calls the consortium format historically weak due to the divergent interests of participants, which slow product development.
Many analysts agree: competition is increasingly shifting to marketing and economics, but replacing years of integrations, liquidity, and trust with bonuses is extremely difficult. Additionally, the legal argument — compliance with MiCA requirements and obtaining licenses — becomes as significant a barrier to entry as capital volumes.
My analysis: OUSD is a serious bid to reshape the market, but not an immediate threat. The real danger for Circle and Tether lies not in the launch of an alternative itself, but in the consortium's ability to overcome internal governance disagreements. If they can replicate the network effects accumulated by the leaders over the years, we will see a fundamental shift. For now, it is more of a powerful signal of dissatisfaction with the current model than its imminent collapse.