The share price of Circle Internet Corp. tumbled 16.6% in late trading on Tuesday following the announcement of a new stablecoin project, Open USD. This initiative, backed by a consortium of over 140 companies including Visa, Mastercard, Stripe, BlackRock, Coinbase, and Google, presents a direct competitive challenge to Circle's dominant USDC stablecoin.

The competitive edge of Open USD lies in its revenue-sharing structure. Unlike USDC, where Circle retains all earnings from the reserve assets, Open USD allows its ecosystem partners to keep the interest generated by the reserves, requiring only a minimal service fee. It also eliminates minting and redemption charges. Analysis highlights that interest income constituted 99% of Circle's total revenue in 2024, meaning Open USD's free model directly undercuts Circle's primary profit engine. Furthermore, Coinbase, which has historically distributed USDC, has now joined the Open USD alliance, intensifying the competitive pressure on Circle.

The stablecoin market has surpassed $300 billion in 2025. Tether (USDT) leads with a market cap of approximately $1.85 trillion, commanding about 60% share, while USDC follows with around $770 billion, holding roughly 24% market share. Bernstein analysts previously projected that under new regulatory frameworks, USDC's supply could nearly triple to $2.2 trillion by the end of 2027, potentially increasing its market share to one-third. However, the arrival of Open USD could disrupt this trajectory. Governed by an independent council with a core focus on compliance, the Open USD stablecoin is slated for launch sometime in 2026.