Key Takeaways:
A consortium-backed stablecoin is reshaping the economics that made Tether and Circle dominant.
Open USD, backed by more than 140 companies including Visa, Mastercard, Stripe, Coinbase and BlackRock, launched a revenue-sharing model that passes most reserve earnings to distribution partners, directly challenging the fee structures of incumbent stablecoin issuers. The stablecoin market has grown to more than $300 billion in total supply, with payment volume reaching an estimated $390 billion in 2025 — more than double the prior year.
"OUSD is primarily built to share stablecoin reserves across its partners, including Visa, Stripe, Coinbase, Mastercard, and leading blockchains such as Sui," said Louisa Bai, Head of Stablecoins at Mysten Labs. "Its partner network and revenue-sharing model could increase competition in a market with deeply entrenched incumbents."
The competitive threat has already drawn a sharp response from Wall Street. Mizuho Securities downgraded Circle Internet Group, the issuer of USDC, to underperform from neutral and cut its price target to $50 from $85 — the lowest on the Street — citing Open USD's pass-through mechanism, which retains only a minimal operational charge while directing the bulk of reserve income to participating companies. Circle's stock has lost more than 75 percent of its value since its initial public offering and traded at $60.08 as of the latest session, down 28 percent year to date.
The pressure on Circle may intensify in August when its revenue-sharing agreement with Coinbase — a member of the Open Standard consortium — comes up for renewal. Mizuho projects Circle's distribution and transaction expenses will reach 73 percent of revenue in 2027, up from a prior estimate of 64 percent, with adjusted EBITDA of about $699 million versus Wall Street's consensus of $941 million. USDC's outstanding supply has fallen to approximately $73 billion from peaks near $80 billion earlier this year, reflecting a broader contraction of about $10 billion in the stablecoin sector since May.
Different Stablecoins Will Serve Different Products
The stablecoin market is fragmenting by use case rather than consolidating around a single dominant model. PYUSD remains tied to PayPal's consumer products, while Open USD may develop around business payments and merchant settlement. Exchange-backed coins focus on trading, and bank-supported assets serve treasury management and institutional transfers.
"Different stablecoin assets aimed at different use cases will coexist, together with different forms of control," Bai said.
Marc Boiron, CEO of Polygon Labs, said Latin America leads in stablecoin adoption for everyday use. "When a currency loses value overnight and sending money home costs 6 percent and takes three days, a digital dollar is a household decision," he said. Boiron pointed to the Mexico-US and Brazil-US corridors as major sources of current volume, and noted that emerging markets such as Argentina, Brazil and Pakistan use dollar stablecoins as protection from inflation.
Local-currency stablecoins are developing a separate role. Kevin Cui, Executive Director and Chief Executive Officer of OSL Group, said they reduce foreign-exchange exposure for businesses operating in euros, reais or yen. "Local-currency stablecoins are developing a durable role alongside dollar coins by reducing FX exposure and allowing businesses operating in euros, reais, or yen to retain their own unit of account," Cui said.
Blockchains Provide the Settlement Base
Blockchains determine how efficiently stablecoins move between users and financial applications. Sui introduced gasless stablecoin transfers in May 2026, allowing users to send supported assets without holding SUI separately for transaction fees. Confidential transfers entered public beta in June, letting issuers conceal balances while preserving access for compliance and auditing. Sui also recorded more than six million transactions per second during a July public experiment using programmable tunnels.
"The most valuable stablecoin is the one everyone else already accepts," Boiron said.
Dollar coins will retain their lead in global markets, while local-currency assets develop around domestic payments and regional commerce. The strongest providers will combine reliable reserves with liquidity, distribution and efficient settlement — a combination that Open USD's consortium model is designed to deliver through shared incentives rather than centralized control.
This article is for informational purposes only and does not constitute investment advice.
