Circle Stocks Plummet as New Stablecoin Open USD Threatens Dominance

Circle Internet Group shares plummeted by over 16% on Tuesday after the announcement of Open USD, a new US dollar-backed stablecoin that threatens to disrupt Circle's dominance in the market.

The Open USD initiative is backed by a coalition of more than 140 financial and technology companies, including Visa, Mastercard, Stripe, BlackRock, Bank of New York Mellon, Coinbase, Alphabet's Google, IBM, Klarna, American Express, Standard Chartered, BBVA, DBS, Shopify, SoFi, Adyen, Gemini, Galaxy, Ripple, Crypto.com, and Polygon.

The consortium plans to launch Open USD later this year, which will allow users to mint and redeem tokens at no cost. The company added that nearly all income generated from the reserves backing the token, after deducting a small management fee and operational expenses, will be distributed among participating companies that adopt and help expand the network.

Circle CEO Jeremy Allaire sought to reassure investors following the announcement, stating that USDC remains the most trusted, widely adopted, institutional-ready stablecoin in the world. He added that the company welcomes competition.