Circle Falls as Much as 8% After Stripe, BlackRock Back Rival Stablecoin Network

Circle Internet Group Inc. shares fell as much as 8% intraday after news that Stripe, Coinbase Global Inc. and BlackRock Inc. were among the companies backing a new stablecoin network.

CoinDesk reported on June 30 that a consortium including Stripe, Coinbase, Mastercard Inc., Visa Inc. and BlackRock had unveiled OpenUSD, a new dollar-based stablecoin.

OpenUSD is being developed by an independent entity called Open Standard. Its founding partners include Stripe, Coinbase, Mastercard, Visa and BlackRock, as well as more than 140 companies across payments, banking, fintech and crypto.

The project is led by Zach Abrams, co-founder of stablecoin infrastructure company Bridge, which Stripe acquired in 2024. Abrams said existing stablecoins have major strengths, but broad enterprise adoption requires a structure that is open, low-cost, high-throughput, widely accessible and aligned with participants' interests.

OpenUSD is pitching a revenue model that differs from existing stablecoins. Participating companies will be able to mint and redeem tokens without fees, and income generated from reserve management will be shared with partners after management fees are deducted.

The structure appears to target Circle's core business model. Circle derives much of its revenue from interest income earned by investing USDC reserves in short-term US Treasuries and similar assets. OpenUSD, by contrast, is designed to share that income across network participants rather than leave it with a single issuer.

CoinDesk said stablecoin competition is shifting from a battle over issuance to a contest for underlying infrastructure and network dominance. Dollar-pegged stablecoins were once used mainly by crypto traders, but their use has expanded to cross-border payments, merchant settlement and corporate treasury operations.

The stablecoin market has surpassed $300 billion, and Citigroup projects it could grow to $4 trillion by 2030.

OpenUSD's structure is also similar to the Global Dollar Network, or USDG, led by Paxos. USDG likewise shares reserve income with participating companies, and its backers include Robinhood Markets Inc., Kraken and Galaxy Digital Holdings Ltd.

That raises the competitive pressure on Circle. USDC has a market capitalization of about $73 billion and has built a position as a regulation-friendly stablecoin for institutions. Tether's USDT, meanwhile, remains the market leader at about $145 billion, driven by crypto trading and payments in emerging markets.

OpenUSD targets the same user base as Circle. It offers banks, payment companies and fintech firms an economic incentive beyond serving as distribution partners by sharing reserve income with them.

CoinDesk said OpenUSD is challenging the institutional stablecoin market centered on USDC by emphasizing reserve-interest sharing and joint governance.