In short
- More than 140 companies have joined forces to unveil Open USD, a new stablecoin managed by an independent regulator called Open Standard.
- It promises free, no commissions/redemptions, shared savings with partner businesses (minus a small fee), and management by a network of affiliated companies.
- Circle’s stock fell nearly 16% the day after the announcement.
Coinbase, Visa, Mastercard, Stripe, BlackRock, and more than 140 other companies have joined forces to launch a new stablecoin called Open USD (OUSD), aiming to create a shared digital payment platform that no single company controls.
The news appears to have shaken the price of USDC stablecoin issuer Circle (CRCL), with shares falling nearly 16% on the day to a recent low of $63.99, on Yahoo Finance. This pushed the company’s decline to 39% in the last month. Coinbase is a major supporter of Circle, but has also thrown its weight behind Open USD.
Money, it was revealed on Tuesday is an independent operator called Open Standard, designed to address the complaints that have dogged the stablecoin industry as it has grown: high fees for minting and exchanging tokens at scale, providers that pocket the interest they earn on reserves, and the lack of support for businesses that actually use money.
Open Standard—which is led by CEO Zach Abrams, who previously founded the company’s Stripe-acquired stablecoin, Bridge—said businesses will be able to create and redeem Open USD for free without volumes. Affiliates, on behalf of the issuer itself, will collect earnings from deposits, minus administrative fees.
The authority will have a group drawn from companies that own Open USD instead of a single parent, the planners explain that it is important for success to adopt many children.
“Existing stablecoins have great potential, but to use them at scale, businesses need products that are open, affordable, cost-effective, deeply accessible, and tailored to their needs,” Abrams said, in a statement.
The previous list includes payment giants such as Visa, Mastercard, and American Express, banks including BlackRock, BNY, and Standard Chartered, technology companies such as Google and Shopify, and crypto players such as Coinbase and Ripple.
The workers planned the experiment as an attempt to create neutral structures similar to the original Internet. BlackRock’s Samara Cohen called it a “good step to give businesses a choice,” while BNY said the growing stablecoin market could grow to $1.5 trillion by 2030.
Open USD is expected to be available later this year.
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