Stablecoins have become by far the most widely used application of cryptocurrencies. While bitcoin’s daily trading volume is hovering around $43.6 billion in the depths of the current bear market, stablecoins recorded $93.7 billion over the past 24 hours, according to CoinMarketCap. Their total market capitalization now stands near $314 billion, led by Tether’s USDT at $184 billion, Circle’s USDC at $73 billion, and decentralized stablecoin DAI at $5.4 billion.
Most of this volume comes from international transfers, remittances, and payments to merchants that accept crypto directly. But stablecoins are also starting to encroach on traditional payment services through crypto payment cards. According to The Kobeissi Letter, deposits on these cards have surpassed $10 billion for the first time, rising 82% since the beginning of the year and nearly 250% over the past twelve months.
On Wall Street, stablecoins have become a part of the permanent financial infrastructure. Most recently, BNY, the world’s largest custody bank, with $59 trillion in assets under custody and administration, announced that USDC will become the first stablecoin supported on its Digital Asset Custody platform.
The stablecoin market is big already, but it could become huge and reach some $1.5 trillion by 2030, according to BNY. This helps explain the attention around Open USD, a new stablecoin backed by a number of high-profile, mostly U.S.-based crypto, fintech and financial companies.
Shares of Circle (CRCL), the issuer of the competing stablecoin USDC, tumbled 19% following the announcement, deepening their monthly decline to 43%. The sharp reaction highlighted how seriously investors are taking Open USD's attempt to reshape the economics and governance of stablecoins.
What is Open USD?
Open USD (OUSD) was announced on June 30 as a new dollar-backed stablecoin governed by Open Standard. The organization promised free minting and redemption, revenue sharing with partners, and governance distributed among more than 140 participating companies, including Coinbase, Visa, Mastercard, BNY, Standard Chartered, Stripe, BlackRock, Google, Shopify and Ripple.
Expected to go live later this year, OUSD is designed to address several complaints that have dogged the stablecoin industry as it has grown: high fees for minting and redeeming tokens at scale, issuers keeping the interest earned on reserves, and limited input from the businesses actually using the coins. “Businesses need something that’s open, low-cost, high-throughput, broadly accessible, and aligned to their interests,” said Open Standard CEO Zach Abrams while unveiling the project. Supporters hope the model can create neutral payment infrastructure similar to the early internet.
Will USDC lose market share to OUSD?
The announcement weighed on Circle because USDC is the largest fully compliant, mostly U.S.-oriented competitor in the stablecoin market. While Tether’s USDT commands the largest market share, it is often viewed as insufficiently transparent and too lightly regulated for major Western jurisdictions. Unlike Circle, Tether has not sought authorization under the European Union’s MiCA framework, prompting regulated exchanges to delist or restrict USDT for EU users.
CRCL’s reaction was likely amplified by Coinbase’s decision to back Open USD despite remaining Circle’s largest distribution partner for USDC. Although the companies ended their joint governance of USDC when the Centre Consortium was dissolved in 2023, they continue to share revenue from the stablecoin.
In a lengthy X post Circle CEO Jeremy Allaire dismissed concerns that Open USD represents a major competitive threat, arguing that stablecoins are ultimately network-effect businesses that take years to build.
"We've invested in building that ecosystem over nearly a decade," Allaire wrote, pointing to USDC’s integration across thousands of applications and payment services. In his view, liquidity, regulatory approvals and global banking infrastructure create competitive advantages that cannot easily be replicated through a consortium model.
Allaire also argued that promises of free minting and redemption are unlikely to prove sustainable at scale because payment infrastructure still requires ongoing investment.
He also expressed skepticism that a consortium of more than 140 companies could innovate as quickly as a single operator, arguing that large industry alliances tend to suffer from slow decision-making and conflicting incentives.
One thing already appears certain: stablecoins have evolved far beyond their original role as a trading tool. As banks, payment networks and technology companies compete to build the rails for digital dollars on blockchain, the sector is becoming one of the most strategically important battlegrounds in global finance.
