Circle Shares Slide 16% After OpenUSD Debut; Analysts Say Competition Fears Are Overdone

Circle shares slid sharply after Open Standard announced plans to launch a new stablecoin.

The Block reported on June 30 that Open Standard unveiled OpenUSD, or OUSD, a stablecoin involving more than 140 companies including Visa, Stripe, Mastercard, BlackRock and Coinbase. The announcement triggered a broad selloff in Circle shares as investors worried about a new competitive threat to USDC, pushing the stock down more than 16%.

William Blair analysts Andrew Jeffrey and Arib Chowdhury wrote in a research note that the competitive concerns were exaggerated. They reiterated an Outperform rating on Circle and said the sharp decline presented a buying opportunity. In their view, Circle remains better positioned than new rivals because USDC has a market capitalization of about $74 billion, deep liquidity and supporting infrastructure through the Circle Payments Network.

The analysts also questioned OpenUSD's business model. Open Standard has said it will share most reserve income with participating companies, but Jeffrey and Chowdhury wrote that Circle already offers similar incentives to partners and described OpenUSD as "a solution in search of a problem." They also cited past payment consortia such as MCX and Paze, which failed to move beyond existing networks, as examples of the constraints facing new entrants.

Circle Chief Executive Officer Jeremy Allaire wrote on X shortly after the announcement that USDC remains "the most trusted, most widely adopted institutional-grade stablecoin in the world." He added that Circle would continue investing across the ecosystem, including banks, payments companies and capital-markets firms.

Tether Chief Executive Officer Paolo Ardoino wrote on social media the same day, "Welcome OUSD. The second player has entered the game."