Circle Climbs 7% After $64 Open, but OUSD Keeps Pressure on Its Yield Strategy

The battle for reserve yield

The title of Circle, the issuer of USDC stable coinsurged 7% on Monday as investor panic following the announcement of the launch of rival coin Open USD eased. According to market data, CRCL rose above $69.52 around 3:30 p.m. EST, after starting the session at just over $64. Nonetheless, at the time, the stock was still more than 5% below its June 29 opening price of $75 and well below its opening price of $75. peak since the beginning of the year of more than $132 recorded around March 18.

The stock volatility follows a turbulent session last Tuesday, when a single press release sent Circle stock down 17% in one day. A consortium of more than 140 companies, including Visa, Mastercard, Stripe, Google and Blackrock, announced the development of Open USD (OUSD). Led by Zach Abrams, the project is seen as directly targeting Circle’s core business model.

According to one analyst, about 96% of Circle’s business income is derived from reserve interest earned on cash and treasury bills backing USDC. Unlike Circle, which retains almost all of this yield, Open USD reportedly intends to eliminate minting and redemption fees and redirect almost all of the reserve revenue to the partners who drive the transaction. volume. Critics note that the announcement creates immediate direct pressure on Circle’s market niche, particularly regarding its relationship with Coinbase.

Coinbase, Circle’s main distribution partner, earned approximately $908 million in 2024 from a revenue sharing agreement that is up for renewal in August 2026. By joining the Open USD consortium ahead of the renegotiations, Coinbase significantly increased its revenue. leverage. Furthermore, the threat highlights a broader shift in the sector: the highly profitable “float” on stable coin Reserves are now openly disputed, exposing Circle’s reliance on interest margins.

Still, Open USD faces significant regulatory hurdles that have yet to be fully addressed by the market, according to Dolak1ng, a research professor at Defi. He asserts that the GENIUS law prohibits stable coin issuers from paying yields to holders, and a February proposal from the Office of the Comptroller of the Currency (OCC) seeks to extend this ban to yields routed through third parties. So while Open USD’s parent company, Open Standard, plans to argue that the model amounts to an exclusion for unaffiliated partners, the legality of the structure remains unclear.

Infrastructure as strategic hedge

At the same time, Open USD’s ability to attract some of the largest payment providers and fintech companies could indicate that the next phase of stable coin growth is shaped not only by crypto-native issuers, but also by crypto entities as well. This market development raises the broader question of who will ultimately control the next generation of digital dollar infrastructure: crypto-native players, traditional financial institutions, global payment networks, or technology platforms commanding massive distribution networks.

Ozan Ozerk, founder of Openpayd, emphasized that infrastructure remains the ultimate protection against this change. “You don’t need to choose the winner stable coin if you are the layer that holds them and moves them all,” Ozerk said Bitcoin.com News. “Fragmentation is not a threat to infrastructure – it’s why infrastructure matters. As the reserve economy shifts toward companies that shift these balances, neutral orchestration becomes the sustainable position, regardless of which piece comes out on top.”

Minchi Park, COO and co-founder of Coinfello, added that a consortium stable coin backed by payment networks and asset managers is less about a new currency and more about a new settlement rail.

“For platforms like ours that enable AI agents to execute on-chain operations, this matters more than market share,” Park said. “Agents need a deterministic, deep regulation liquidity on the channels they operate on and on the transmitters that treat programmability as a feature and not an afterthought. Fragmentation between issuers is a good thing. Fragmentation between trust models is not.