Visa, Mastercard, and 140 companies have introduced Open USD, a stablecoin designed to compete with Circle.

      A coalition of over 140 financial and technology firms, including Visa, Mastercard, Stripe, and Coinbase, introduced a new dollar-pegged stablecoin named Open USD on Tuesday. This initiative, managed by the independent entity Open Standard, directly challenges the economic model that has allowed Circle and Tether to dominate the market.

      Open USD, which trades as OUSD, is structured so that businesses can create and redeem the token without any fees or volume limitations. A significant change in this model is related to the reserves—almost all the interest generated from the assets supporting OUSD will benefit partners after deducting a management fee, rather than being allocated to a sole issuer.

      The governance model of Open Standard comprises the partners from the consortium, which frames the leadership as collective instead of being controlled by a single entity. Zach Abrams, co-founder and CEO of Stripe-owned infrastructure company Bridge, is set to be the founding CEO of Open Standard. "While existing stablecoins have notable strengths, businesses require a system that is open, cost-effective, high-capacity, easily accessible, and aligned with their interests," Abrams stated during the launch.

      The market reacted promptly to the announcement, with Circle’s stock suffering a significant decline of 15 to 17 percent according to various reports. The impact is partly felt because several of OUSD's backers, such as BlackRock and BNY, are also key partners in Circle’s ecosystem, effectively shifting recognizable institutional entities to a competing platform.

      However, the competition landscape is formidable. As of April, Tether’s USDT represented approximately 62 percent of the stablecoin market, while Circle’s USDC accounted for about 25 percent, based on data from CoinDesk. Analysts were quick to warn that the stock sell-off might be premature; one researcher from Ark Invest expressed skepticism about Open USD’s ability to rival Circle, citing the challenges in replicating the incumbent’s distribution advantages.

      The launch occurs amidst a markedly different regulatory backdrop. The GENIUS Act, enacted in July 2025, established a federal framework for payment stablecoins, facilitating the entry of new competitors. This regulatory structure suggests that the sector is evolving from a crypto niche to a critical element in corporate payments, emphasized by the involvement of the two largest card networks.

      For Visa and Mastercard, this initiative aligns with a broader strategy of diversification. Mastercard’s recent acquisition of stablecoin company BVNK for up to $1.8 billion demonstrates their commitment to participating in tokenized settlements. The broader competition among institutions is also evident, with banks exploring trust issues related to big tech and Wall Street racing to tokenize assets, as seen with JPMorgan’s tokenized money-market fund on Ethereum.

      Open Standard has not announced a specific launch date, although the token is anticipated to go live later this year and by 2026 at the earliest. Regardless of whether OUSD emerges as a true competitor or merely a negotiating tool against Circle’s pricing, the consortium's message is clear: the most lucrative aspect of the stablecoin sector, the reserve interest, is now open to contestation.