Circle’s stock drops sharply after Coinbase, BlackRock, and Visa back a competing stablecoin with no minting fees or volume caps.
Circle’s stock plunged nearly 16% to $63.99 after a coalition of over 140 firms, including Coinbase, Visa, and BlackRock, announced the launch of Open USD (OUSD), a new stablecoin. The move aims to create decentralized digital payments infrastructure, challenging existing stablecoins like USDC.
The new stablecoin, unveiled by independent operator Open Standard, addresses industry complaints such as high minting fees, issuer-controlled reserves, and lack of governance input from users. Open USD will allow free minting and redemption with no volume limits, while earnings on reserves will be shared among partners.
Circle, a key USDC issuer and Coinbase ally, has seen its shares fall 39% in the past month amid growing competition in the stablecoin market.