Open USD Aims to Disrupt USDC Reserve Yield Model
CoinShares states that the stablecoin project Open USD, driven by a banking alliance, may directly impact the distribution economic model and profit margins of USDC, which is under Circle, as it plans to distribute reserve yields to participating partners rather than primarily retaining them by the issuer. This mechanism could increase the costs of maintaining the USDC circulation network and create substantial competitive pressure once it launches in the second half of 2026; details of Open USD have not yet been disclosed, but it remains a credible challenger.
In market dynamics, the yield-sharing design of Open USD attracts corporate and institutional funds to its ecosystem, shifting capital from traditional issuer-led stablecoins to a partner revenue-sharing model, intensifying competition in liquidity and payment scenarios, with Circle under pressure due to the involvement of players like Visa and Stripe.
Source: Public Information
ABAB AI Insight
Circle previously built its core profit model through USDC reserve interest retention, achieving high profits during the stablecoin bull market from 2023 to 2025, similar to Tether's early monopoly but facing regulatory and competitive diversions.
In terms of capital pathways, Open USD mobilizes resources from over 140 institutions through zero-cost minting and redemption and yield returns to partners, motivated by the goal of establishing decentralized governance and a shared economic model, challenging the dominance of a single issuer.
Similar to the multi-issuer competition under the EU MiCA or PayPal's stablecoin attempts, the current stablecoin market is transitioning from centralized issuance to alliance-based shared governance.
Essentially, this involves capital concentration and the transfer of pricing power, as alliances of banks and payment giants are reconstructing the stablecoin profit pool through yield redistribution, with mechanisms that lower entry barriers for enterprises through zero-cost access, promoting capital aggregation towards multi-party governance ecosystems, and weakening traditional issuers' monopolistic control over reserve yields.
ABAB News · Cognitive Laws
- Yield sharing surpasses monopolistic profits.
- Alliance governance dilutes singular control.
- Zero-cost minting accelerates stablecoin adoption.