Open USD rattled Circle's stock, but its key backers still support USDC

When Open Standard announced Open USD a month ago, investors quickly interpreted the backing from Coinbase (COIN), Visa (V) and Mastercard (MA) as a direct challenge to Circle (CRCL) and its $72 billion USDC stablecoin.

The announcement erased billions of dollars from Circle's market value. Shares fell as much as 20% --- and have yet to recover --- as the consortium unveiled more than 140 launch partners, fueling concerns that some of USDC's largest commercial partners were lining up behind a rival digital dollar.

The reaction highlighted a broader shift in the stablecoin market. Once dominated by a handful of crypto-native issuers like Circle, the sector now is drawing banks, payment networks and fintech firms eager to issue or distribute digital dollars as regulation clears the way for wider adoption. With that, the competitive battle is increasingly extending beyond issuing tokens to securing the payment rails, exchanges and financial platforms that put them into users' hands.

Recent earnings calls from Open USD's highest-profile backers, however, paint a more nuanced picture. Executives at Coinbase, Visa and Mastercard all said they intend to support multiple stablecoins instead of betting on a single winner, describing Open USD as another network to connect to rather than a replacement for USDC.

Multi-coin strategy

During its second-quarter earnings call last week, Coinbase reassured investors about its close relationship with Circle. Chief Financial Officer Alesia Haas said the exchange has already met the conditions to renew its commercial agreement with Circle and will continue growing the USDC ecosystem.

CEO Brian Armstrong also said Coinbase remains a "multi-stablecoin platform" and wants to support whichever stablecoins customers choose to use. The exchange already supports USDC alongside Tether's USDT and PayPal's PYUSD, he said, with Open USD creating "additional business opportunities and revenue opportunities."

Ryan McInerney, CEO of Visa, struck a similar tone during his firm's earnings call, describing the company as "multi-coin, multi-chain" and saying that Visa's role is to help clients connect to whichever stablecoins gain adoption.

"Our role is not to pick winners," he said.

Notably, Visa offered the first live example of pushing Open USD to customers. The firm last month launched its Visa Stablecoin Platform, giving banks, fintechs and payment providers tools to access, store, redeem and move stablecoins, with OUSD serving as the initial supported token.

Mastercard CEO Michael Miebach said the company already supports USDC, Paxos-led Global Dollar Network (USDG) and other stablecoins, describing Open USD as "another coin that we will enable across our network."

"Choice has always been a key criteria and will be the same here in stablecoins," he said.

Miebach described Open USD as a payments-focused utility with shared economics, while acknowledging governance would not involve all 140-plus partners. "Otherwise we wouldn't move anything forward," he said. The firm -- and recently acquired BVNK --- are also listed as ecosystem members of USDG, another consortium-governed stablecoin project that includes Robinhood among its members.

An Open Standard spokesperson did not comment on the executives remarks and governance behind the project, adding that the firm will share more details at launch later this year.

Support versus commitment

The executives' comments suggest that observers may have read too much into Open USD's kick-off partner list, analysts noted.

"It is becoming increasingly clear that the commitment from OUSD's partners is closer to a soft LOI [letter of intent] than a strategic bet," Lorenzo Valente, director of digital asset research at ARK Invest, wrote on X. "Supporting OUSD is very different from committing meaningful resources, distribution, or balance sheet to making it win."

Amey Dandawate, director at Bluechip Ratings, told CoinDesk that joining the consortium amounts to "a free option" that allows companies to participate if Open USD gains traction without making meaningful upfront commitments.

Others cautioned that execution will be more important than the --- otherwise impressive --- size of the partner list.

Owen Lau, managing director at Clear Street, said the market overreacted to the initial announcement. USDC and Tether's USDT already benefit from deep liquidity and network effects, he said, making adoption a much bigger challenge than signing up partners.

"It is very difficult to align the interests of so many partners with different incentives and agendas," Lau said. Still, he said the participation of Visa, Mastercard and Coinbase could help accelerate stablecoin use in consumer payments regardless of which token ultimately gains the most traction.

Dragonfly general partner Rob Hadick said the executives reinforced his view that Stripe remains the driving force behind Open USD, while Visa and Mastercard have commercial reasons to remain neutral because they work with competing issuers.

"Their businesses require them to not alienate partners and customers," Hadick told CoinDesk. "They may push OUSD, but they must be open."

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