Open USD Stablecoin Project Draws Comparison to USDC, Threatens Circle's Margins

A new stablecoin project called Open USD is drawing comparisons to Circle's USDC from crypto asset manager CoinShares. In a report, CoinShares said Open USD poses a credible threat to Circle Internet than any previous rival.

The threat is not about brand recognition, but who keeps the money that reserves generate. While Circle retains the yield produced by the assets held in reserve behind the stablecoin, Open USD plans to distribute it to businesses using the stablecoin instead of keeping only a management fee.

CoinShares analyst Luke Nolan wrote that this approach could compress Circle's margins and raise the cost of maintaining USDC's distribution network. Open USD has attracted over 140 companies as backers, including BlackRock, Coinbase, Mastercard, Stripe, and Visa.