Circle stock drops 20% as Open USD backers reaffirm USDC support

Circle's stock fell as much as 20% after Open Standard unveiled Open USD with 140-plus launch partners including Coinbase, Visa and Mastercard, wiping billions from the USDC issuer's market value.

"Our role is not to pick winners," Ryan McInerney, CEO of Visa, said on the firm's earnings call, describing the company as "multi-coin, multi-chain."

Coinbase CFO Alesia Haas said the exchange has already met conditions to renew its commercial agreement with Circle. Mastercard CEO Michael Miebach called Open USD "another coin that we will enable across our network." The executives' comments suggest the market overreacted to the initial announcement, analysts said.

The stablecoin sector is shifting from a handful of crypto-native issuers to a broader field of banks, payment networks and fintechs, with the competitive battle extending beyond token issuance to payment rails, exchanges and financial platforms. Open USD is expected to launch later this year.

Multi-coin strategy

Coinbase CEO Brian Armstrong said the exchange remains a "multi-stablecoin platform" and wants to support whichever stablecoins customers choose to use. The exchange already supports USDC alongside Tether's USDT and PayPal's PYUSD, with Open USD creating "additional business opportunities and revenue opportunities."

Visa offered the first live example of pushing Open USD to customers. The firm last month launched its Visa Stablecoin Platform, giving banks, fintechs and payment providers tools to access, store, redeem and move stablecoins, with OUSD serving as the initial supported token.

Mastercard already supports USDC, Paxos-led Global Dollar Network (USDG) and other stablecoins. Miebach described Open USD as a payments-focused utility with shared economics, while acknowledging governance would not involve all 140-plus partners. "Otherwise we wouldn't move anything forward," he said.

Support versus commitment

"It is becoming increasingly clear that the commitment from OUSD's partners is closer to a soft LOI [letter of intent] than a strategic bet," Lorenzo Valente, director of digital asset research at ARK Invest, wrote on X.

Amey Dandawate, director at Bluechip Ratings, told CoinDesk that joining the consortium amounts to "a free option" that allows companies to participate if Open USD gains traction without making meaningful upfront commitments.

Owen Lau, managing director at Clear Street, said the market overreacted to the initial announcement. USDC and Tether's USDT already benefit from deep liquidity and network effects, he said, making adoption a much bigger challenge than signing up partners.

"It is very difficult to align the interests of so many partners with different incentives and agendas," Lau said. Still, he said the participation of Visa, Mastercard and Coinbase could help accelerate stablecoin use in consumer payments regardless of which token ultimately gains the most traction.

Dragonfly general partner Rob Hadick said the executives reinforced his view that Stripe remains the driving force behind Open USD, while Visa and Mastercard have commercial reasons to remain neutral because they work with competing issuers.

"Their businesses require them to not alienate partners and customers," Hadick told CoinDesk. "They may push OUSD, but they must be open."

Circle's reserve income, which is earnings generated on assets backing USDC, drove $2.64 billion of the company's 2025 revenue. That makes its top line sensitive to both the size of USDC in circulation and competition from dollar-denominated stablecoins. The more immediate pressure point is the revenue-sharing agreement between Coinbase and Circle, up for renewal in August, under which Coinbase keeps 100 percent of interest income on USDC held on the exchange and splits revenue 50/50 on USDC circulating elsewhere.

This article is for informational purposes only and does not constitute investment advice.