Circle rebounds as Open USD rivalry grows
- Circle shares rose about 7% after falling sharply following the announcement of the Open USD stablecoin project.
- Open USD's proposed revenue-sharing model has intensified competition over stablecoin reserve income.
- Analysts said regulatory uncertainty could affect whether Open USD's yield strategy can be implemented.
Circle Internet Group shares rose about 7% after opening above US$64, recovering some of the losses triggered by the announcement of the competing Open USD stablecoin project.
The rebound followed a 17% decline after a consortium including Visa, Mastercard, Stripe, Google and BlackRock announced plans to develop Open USD, a stablecoin designed to compete with USD Coin (CRYPTO:USDC).
“You don’t need to pick the winning stablecoin if you’re the layer that holds and moves all of them,” said Openpayd founder Ozan Ozerk.
Analysts said Circle derives about 96% of its revenue from interest earned on reserves backing USDC, while Open USD plans to return most reserve income to participating partners and eliminate minting and redemption fees, although the project's structure may face regulatory scrutiny.
Circle's revenue-sharing agreement with Coinbase Global is due for renewal in August 2026, with investors closely watching how increased competition could affect the company's stablecoin business, and following the announcement Circle shares were up about 7%.
Some analysts said proposed US regulation, including the GENIUS Act and a proposal from the Office of the Comptroller of the Currency, could restrict stablecoin yield distribution, creating uncertainty for Open USD's proposed model.
Industry participants said competition is shifting beyond individual stablecoins towards the infrastructure supporting digital dollar payments, with payment providers, financial institutions and technology companies increasingly competing for settlement and distribution networks.
