Open USD Launch Sparks Concerns Over Stablecoin Market Share

KeyBanc analyst Alex Markgraff has issued commentary on Circle and Coinbase following the launch of Open USD, a new stablecoin backed by over 100 fintech, payments, and crypto companies.

The new stablecoin features collective governance, majority reserve income sharing, and no mint or burn fees. Partners include bank technology players like Fiserv and Jack Henry, B2B payments companies such as Brex and Ramp, merchant technology providers like Adyen and Stripe, and fintech platforms like Chime and Remitly.

KeyBanc views the development as negative for Circle (NYSE:CRCL) due to potential USDC market share erosion. However, they see it as mostly positive for Coinbase (NASDAQ:COIN) as a partner, although near-term USDC-related reserve income headwinds could emerge if meaningful share shifts away from USDC occur.

The analyst noted that it becomes more important for Coinbase to drive on-platform stablecoin adoption. KeyBanc sees Open USD as plausible to offset in scale and act as a catalyst for broader stablecoin adoption over time.