# Open USD Is Coming for Circle's Margins *Author: David Christopher* *Published: Jul 1, 2026* *Source: https://www.bankless.com/fr/read/open-usd-is-coming-for-circles-margins* --- Yesterday, [Open USD debuted](https://joinopenstandard.com/blog/introducing-open-usd): an upcoming dollar-denominated stablecoin from a consortium that includes Stripe, Visa, Mastercard, Coinbase, BlackRock, BNY, Google, Shopify, Solana, MetaMask, Aave, MoneyGram, Western Union, and Klarna. It goes live later this year. Circle's stock dropped nearly 20% on the day. The market saw the backer list and rushed to the obvious conclusion, namely that a new stablecoin, armed with the biggest names in payments and crypto, was coming for USDC's crown. The cleaner read is that Open USD threatens the *economics *of Circle’s dominance before it threatens the dominance itself. Open Standard, the body governing Open USD, opened its announcement by pointing out that businesses still pay to play in the stablecoin era. They eat the costs of minting and redeeming, then watch the issuers get rich on the reserves those dollars fund. Why let someone else earn on your volume? That's the rallying cry of Open Standard, which will offer free minting and redemptions, a direct share of reserve earnings (after a management fee), and a role in governing the system of OUSD. We don't have all the details yet, but the pitch is clear. It's possible to make a better deal for the businesses that use stablecoins. And this challenge points toward a margin problem that Circle has to answer even if USDC never loses a user. [![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/2026/07/data-src-image-b654f5d8-eab1-4be7-9435-9ca949473efc.png)](https://joinopenstandard.com/blog/introducing-open-usd) ## **The Reaction** Circle’s reserve math explains why the stock sold off so fast. [In Q1](https://www.circle.com/pressroom/circle-reports-first-quarter-2026-results) it earned $653 million from reserves and spent $407 million on distribution, transaction, and related costs. In other words, Circle already pays heavily to keep USDC moving through the platforms, exchanges, and wallets that make it useful. Open USD is planning to offer those same partners more, meaning Circle may have to end up paying more to hold the distribution it already has, compressing margins even if USDC keeps growing. Coinbase is where that pressure bites hardest. It appears on the Open USD announcement despite being Circle’s most important USDC partner, receiving a large share of USDC economics and running the rewards program that makes holding USDC on Coinbase attractive in the first place. The timing matters. In August, Coinbase and Circle are expected to revisit the terms of their USDC agreement after its initial three-year run. With Open USD now on the table, Coinbase may push for a bigger share, squeezing Circle even harder. Circle could walk away and distribute USDC itself, roughly doubling revenue on paper, as [Dragonfly’s Rob Haddick has pointed out](https://x.com/HadickM/status/2072286093744234864?s=20), but only by spending *far more *to move the coin without Coinbase’s reach. > I believe that the correct takeaway from OUSD is actually quite nuanced, both specifically to what it means for Circle / Tether / Paxos and more broadly about what it means for adoption and the likelihood of being successful (warning, very long post).First, on CRCL, I wonder if…— Rob Hadick ＞|＜ (@HadickM) [July 1, 2026](https://x.com/HadickM/status/2072286093744234864?ref_src=twsrc%5Etfw) ## **Pushing Back** At the end of the day, all we know for now is that Open USD has distribution advantages on paper, not adoption in practice. Stablecoins win because users have immediate reasons to hold them, and USDC and USDT already have that: deep liquidity, trading pairs, wallet support, integrations everywhere.  USDT is the crypto-native global dollar. USDC is the regulated, institution-ready one, now increasingly embedded in one of crypto’s fastest-growing verticals (perpetuals) through deals with Hyperliquid and [Lighter](https://finance.yahoo.com/news/lit-price-jumps-10-lighter-150750205.html). Open USD has to build all of that from zero. [How USDC Wins the Hyperliquid Deal on BanklessTether dominates Binance, but Coinbase just installed USDC on Hyperliquid. The battle for stablecoin distribution is intensifying.![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/icon/apple-touch-icon-75639d8f-f43a-49f8-8fab-a166e0d736ae.png)BanklessDavid Christopher![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/thumbnail/what-the-hyperliquid-stablecoin-deal-was-really-about-1779218677-da7e12e5-4dd2-4eab-8716-1c8b3bb64def.png)](https://www.bankless.com/read/what-the-hyperliquid-stablecoin-deal-was-really-about)The announcement’s language also softens the logo wall, [as Ark’s Lorenzo Valente notes](https://x.com/lorenzoark/status/2071997238713127404?s=46). BlackRock called Open USD a "constructive step," while BNY said it looks forward to exploring ways to support it. Those are useful endorsements, but they are not commitments to route volume. [![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/2026/07/data-src-image-008ed3aa-71a0-4304-9729-03cc0cbd8e71.png)](https://joinopenstandard.com/blog/introducing-open-usd)Then there is the overlap problem. Several partners already have their own stablecoin efforts. [MoneyGram launched MGUSD](https://www.prnewswire.com/news-releases/moneygram-launches-mgusd-a-stablecoin-to-power-its-own-global-network-302787799.html), [Klarna announced KlarnaUSD](https://www.klarna.com/international/press/klarna-launches-klarnausd-as-stablecoin-transactions-hit-usd27-trillion/), [Western Union has planned USDPT](https://www.westernunion.com/global/en/digital-assets-stablecoin.html). Are they committing to Open USD, hedging, or eventually folding their coins into it? At the end of the day, what Open USD makes clear is that stablecoin issuance has been commodified. Issuers now compete by sharing more of their earnings, and the platforms distributing them compete by passing that yield through and cutting fees as low as they'll go. Circle can absorb some of this, and already spends heavily to defend distribution. The open question is how much it gets to keep for itself after August. That is the reckoning Open USD forces: not the death of USDC, which still owns much of the onchain economy and will not be unseated overnight, but a *repricing *of Circle’s economics and how much it will need to give to be able to still compete. --- *This article is brought to you by [MetaMask](https://www.bankless.com/fr/sponsor/metamask-1776260643?ref=read/open-usd-is-coming-for-circles-margins)*