Circle CEO Jeremy Allaire isn’t impressed with the new stablecoin kid on the block.
Open USD launched Tuesday with over 140 backers — Visa, Mastercard, Stripe, Coinbase, BlackRock, Google. It’s a consortium model where partners get most of the reserve income. Sounds good on paper.
Allaire took to X on Wednesday to make his case. Stablecoins are platform businesses, he said. Network effects matter. USDC has a decade of integrations, liquidity, and regulatory infrastructure that isn’t easy to replicate.
His real question: can you offer free, unlimited minting forever and still keep the lights on? Giving away almost all reserve income “risks starving an infrastructure,” he wrote.
Bernstein analysts think OUSD could be the “strongest new challenger to the Circle-Tether duopoly.” But they also flagged open questions — governance, operations, revenue sharing. Coordinating 140+ partners isn’t trivial. Circle spends close to $500 million a year on marketing, infrastructure, and compliance. That’s the real cost of running a stablecoin network.
ARK Invest’s Lorenzo Valente was even more skeptical. He called the OUSD announcement a “giant letter of intent.” Many of those partners also back competing tokens. Stripe owns Bridge. Coinbase is tied to USDC. Banks are building their own deposit tokens.
Circle’s stock dropped 17.55% Tuesday before bouncing back 2.44% in premarket trading Wednesday. The market isn’t sure what to make of this yet.
