Open USD Stablecoin Threatens Circle's USDC Revenue Model
CoinShares warns that Open USD's yield-sharing model poses a significant threat to Circle Internet's USDC revenue model. The stablecoin project, backed by over 140 companies including BlackRock and Visa, plans to distribute the yield produced by its reserves to businesses using the coin instead of retaining it as Circle does.
According to CoinShares analyst Luke Nolan, this approach could compress Circle's margins and increase the cost of maintaining USDC's distribution network. Nolan wrote that if successful, Open USD 'could push stablecoins further into mainstream payments by making the economics and governance more attractive for the businesses actually using them.'
Circle shares fell over 17% after Open USD's announcement, but CoinShares believes investors may be overreacting. The report argues that Circle retains established advantages despite USDC's share drop, including years of integrations across exchanges, DeFi protocols, and payments networks.