A new stablecoin called Open USD is being built by a consortium of partners who would share in the reserve income — a model that directly threatens the dominant position of Circle’s USDC. According to asset manager CoinShares, Open USD represents the most serious competitive threat yet to the incumbent stablecoin. The project is expected to launch sometime in 2026.
How Open USD Differs
Unlike USDC, where the issuer Circle keeps the interest earned on the dollar reserves backing the coin, Open USD would distribute that income among its consortium members. That structure could attract large crypto exchanges, payment firms, and other financial institutions that currently rely on USDC for liquidity but see little direct return from the reserves they help generate.
CoinShares, which tracks digital asset flows and competitive dynamics, said in a recent report that Open USD’s revenue-sharing model is the biggest challenge Circle has faced since USDC’s launch. The report did not name the consortium members, but the model suggests that major players in the ecosystem could be incentivized to switch or split their stablecoin usage.
Pressure on Circle’s Margins
Circle generates a significant portion of its revenue from the interest on the reserves backing USDC. If Open USD gains traction, that income stream would be shared with partners rather than kept by the issuer. That could force Circle to either lower its fees or offer its own revenue-sharing deals to retain partners, squeezing margins.
The stablecoin market is already crowded, with Tether’s USDT holding the largest market share and USDC in second place. A new entrant with a cooperative structure could reshape the competitive landscape, especially if it wins backing from major exchanges or payment networks.
What’s Next
Open USD is still in development, with a target launch in 2026. No specific date has been announced, and the consortium behind it has not publicly named all participants. The coming months will likely see more details emerge about the governance model, reserve composition, and which partners have committed to the project. For now, Circle and its investors are watching closely.
