Open USD Stakes Claim on Stablecoin Market Share

CoinShares warns that Open USD's yield-sharing model threatens Circle's USDC revenue margins. The stablecoin project, backed by over 140 companies including BlackRock and Visa, plans to distribute reserve income to businesses using the coin instead of keeping it itself.

According to CoinShares analyst Luke Nolan, if successful, Open USD could make stablecoins more attractive for businesses and push them further into mainstream payments. The firm argues that Circle's USDC share of the total stablecoin market has declined to approximately $73 billion from nearly $80 billion in March 2023.

CoinShares also notes that Coinbase's revenue-sharing deal with Circle is up for renewal on August 18, which may be influenced by Open USD's existence. The Japanese investment bank Mizuho downgraded Circle to Underperform and cut its price target to $50 due to the threat posed by Open USD.

Circle retains established advantages despite the decline in USDC's share of the market, including years of integrations across exchanges, DeFi protocols, and payments networks. CoinShares suggests that investors should watch whether Circle changes its distribution strategy and whether Open USD achieves real adoption before drawing conclusions.