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Open USD Consortium Targets Tether and Circle on Two Different Fronts
14 Aug 2026, 13:38
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A new stablecoin consortium backed by more than 140 companies including Visa, Mastercard and Coinbase has not even launched yet, but analysts say it could reshape competitive dynamics for both Tether and Circle in different ways.
A consortium-backed stablecoin called Open USD, still not live, is already reshaping how analysts think about competition in the roughly $310 billion stablecoin market. Backed by more than 140 companies including Visa, Mastercard and Coinbase, Open USD is being positioned as shared financial infrastructure rather than a single company's product, and it appears to be pressuring the two dominant issuers, Tether and Circle, in two distinct ways.
For Tether, the threat is concentrated in the US market. The company chose not to bring its flagship USDT token into compliance with Europe's MiCA framework, and in the US it faces a three-year transition period to meet new reserve and disclosure rules under the GENIUS Act. Rather than adapting USDT itself, Tether launched a separate, US-focused token called USAT in January through a partnership with Anchorage Digital Bank. USAT's market capitalization has grown from around $20 million in April to about $185 million more recently, but analysts note that figure is modest next to what Open USD's backers could bring once the token actually launches. Several people who spoke to reporters emphasized that USDT itself, which commands roughly 59% of the global stablecoin market and dominates cross-border and emerging-market trading, is unlikely to feel much pressure from Open USD given its entrenched international liquidity.
Circle faces a different kind of challenge. Instead of competing head-on for users, Open USD is targeting the economic model that funds Circle's USDC business. Circle earned $668 million from reserves backing USDC last quarter, nearly its entire revenue base, but also spent $412 million on distribution deals with partners like exchanges and banks that help put USDC into circulation. Open USD's model flips that structure: rather than an issuer keeping the reserve income, the consortium plans to share earnings from reserves among participating companies after a management fee, while offering zero-cost minting and redemption. Industry executives describe this as turning a proprietary product into something closer to shared infrastructure, which could be attractive to institutions increasingly moving assets onchain.
Analysts caution the stablecoin market is unlikely to produce a single winner, and instead expect it to consolidate around a handful of large players serving different regions and use cases. But the consensus view is that the real prize is not today's crypto-native trading volume, where USDT still dominates, but the much larger wave of institutional payment flows that have yet to move onchain. If Open USD becomes a preferred settlement rail for banks and payment providers once it goes live, industry voices argue Tether could find itself increasingly boxed into crypto-native markets while institutional liquidity shifts elsewhere, even as Circle faces pressure to defend the distribution-partner economics that currently underpin USDC.
For Tether, the threat is concentrated in the US market. The company chose not to bring its flagship USDT token into compliance with Europe's MiCA framework, and in the US it faces a three-year transition period to meet new reserve and disclosure rules under the GENIUS Act. Rather than adapting USDT itself, Tether launched a separate, US-focused token called USAT in January through a partnership with Anchorage Digital Bank. USAT's market capitalization has grown from around $20 million in April to about $185 million more recently, but analysts note that figure is modest next to what Open USD's backers could bring once the token actually launches. Several people who spoke to reporters emphasized that USDT itself, which commands roughly 59% of the global stablecoin market and dominates cross-border and emerging-market trading, is unlikely to feel much pressure from Open USD given its entrenched international liquidity.
Circle faces a different kind of challenge. Instead of competing head-on for users, Open USD is targeting the economic model that funds Circle's USDC business. Circle earned $668 million from reserves backing USDC last quarter, nearly its entire revenue base, but also spent $412 million on distribution deals with partners like exchanges and banks that help put USDC into circulation. Open USD's model flips that structure: rather than an issuer keeping the reserve income, the consortium plans to share earnings from reserves among participating companies after a management fee, while offering zero-cost minting and redemption. Industry executives describe this as turning a proprietary product into something closer to shared infrastructure, which could be attractive to institutions increasingly moving assets onchain.
Analysts caution the stablecoin market is unlikely to produce a single winner, and instead expect it to consolidate around a handful of large players serving different regions and use cases. But the consensus view is that the real prize is not today's crypto-native trading volume, where USDT still dominates, but the much larger wave of institutional payment flows that have yet to move onchain. If Open USD becomes a preferred settlement rail for banks and payment providers once it goes live, industry voices argue Tether could find itself increasingly boxed into crypto-native markets while institutional liquidity shifts elsewhere, even as Circle faces pressure to defend the distribution-partner economics that currently underpin USDC.