OUSD flips the stablecoin script
The ultimate TradFi move is to turn stablecoins into a utility.
OpenUSD is a new dollar-pegged stablecoin issued by Open Standard, a consortium of who’s who in banking, asset management, payments, fintech, and crypto.
Haven’t we seen this movie before? Blockchain consortiums? Walls of logos backing a new coin?
Yes. But this time, the pile-in may stick. It’s partly timing: OpenUSD comes at a time when regulators are already committed to supporting stablecoin use. It also comes at a point, after many false turns, when financial institutions have learned to treat blockchain-related finance as a specific tool rather than a shiny new thing to go chase.
There are still ways for large herds to mess things up, but OpenUSD has the look and feel of a new utility, more like SWIFT, which is owned by thousands of banks. It is being positioned deliberately as a utility, enabling financial institutions to transform stablecoins from a money-making and disruptive venture into safe infrastructure that ensures fees and value are derived from second-order services on top.
It is, in other words, the logical conclusion of the past several years of institutionalizing crypto. The finance industry, if it hadn’t come up with OpenUSD, would have invented something just like it.
What it is
OUSD is issued by Open Standard, an independent company set up to serve as neutral infrastructure for payments, trading, and on-chain finance. Its governance is overseen by more than 140 founding partners, which range from Visa, Mastercard, and Stripe (payments), to BlackRock, to Google, to BNY Mellon, to Coinbase...etc.
Three design choices define the economics of OUSD and are worth noting.
First: zero mint and redemption fees. At any scale. And with no arbitrary caps as flows grow. This is not the layer where anyone makes money.
Second: reserve yield is distributed back to the businesses that use and distribute the coin, rather than retained by a single issuer *cough* Circle *cough* Tether. In other words, the banks and others are not letting a disruptive issuer win the cheddar.
Third: governance is collaborative through Open Standard rather than relying on a single issuer’s balance sheet. This is sound, although there are still plenty of unanswered questions about the nitty gritty of how decisions will get made.
A fourth design choice: OUSD is multi-chain, scheduled to go live this year on Solana, Stellar, Base, Polygon, and other networks – including Tempo, the blockchain operated by Stripe for its merchant network.
Stripe’s fingerprints are all over OUSD. It acquired stablecoin issuer Bridge in 2024 for $1.1 billion. Then it launched Tempo as a payments settlement layer in September 2025. Bridge’s co-founder Zach Abrams is now interim CEO of OUSD.
What it does
The most obvious point about OpenUSD is that it attacks the profit model of Circle and other regulated stablecoin issuers. Circle and its peers keep the interest on tens of billions of dollars of reserves while charging, in one way or another, for access to minting and burning at scale. But OpenUSD pushes interest on reserves back to distribution partners, including crypto exchanges, banks, wallets, and payment service providers – the entities that actually bring balances and transaction volumes to the party.
Stablecoins have been a profit center. OpenUSD makes them into a loss-leader for other things. Cue the comparisons to SWIFT or a card network. We’ve come a long way from “tokenomics” in crypto-land. This is a means of repositioning stablecoins to move out of crypto-native remittances into corporate payments, capital-market settlements, and treasury working capital.
Another reason to suggest OpenUSD will succeed is that all of these designs for payments and transactions require standards. The industry would prefer standards be universal. One way to make that happen is to get enough big names behind the initiative. Hence the wall of logos. It’s a way of saying, “Argument over.”
Circle: “Et tu, Coinbase?”
Sometimes these big statements fizzle into nothing. But Stripe says it will make OUSD the default stablecoin for businesses using crypto instruments in its network. Yes, its users can still make do with Circle and such. But maybe it’ll be easier for most users to default to whatever looks cheaper and faster. Choice can still be a differentiator but for increasingly niche requirements.
This is a tough challenge for Circle and other regulated stablecoins, such as those being licensed in local jurisdictions in non-USD currencies. Pressure will build to be compatible with a global standard. This doesn’t mean the end of non-USD stablecoins, but it serves OUSD if it can present itself as the default plug-in for local players connecting globally.
First, OUSD blows up the idea that the stablecoin issuer gets to keep the interest. This notion has already been under pressure. Circle already has to kick back a substantial percentage to its primary distributor, Coinbase. Its $70 billion-plus in reserves sits in a dedicated fund managed by BlackRock and held in custody at BNY Mellon.
But Coinbase, BlackRock, and BNY Mellon are among those backing Open Standard. Yes, these firms earn fees by servicing Circle’s reserves, but they can get a much bigger slice of the pie if that accumulating interest goes to them too.
Payments companies (the cards, Western Union, BNPLs like Klarna and Affirm) see an opportunity to compress per‑transaction costs and move more flows on‑chain, even if that eventually eats into traditional interchange; they’re okay with tinier fees if the pie grows fast enough. Tiny fees become moats your would-be competitors can’t cross.
Second, for issuers, the mint-and-burn function goes from looking like a service to the industry to a toll they charge for controlling a choke point. Circle has invested heavily in a range of network infrastructure, including services to move stablecoins across chains, its own SWIFT-like management tools for making cross-border and fiat settlement easy, on-chain FX, developer infrastructure for anyone building applications, and even its own layer-1 settlement chain, Arc.
Circle in other words has devoted enormous resources to an end-to-end system of finance, particularly designed for A.I. agents. And now all the partners it’s relied on are taking the one part of this ecosystem where Circle makes all of its money, and turning that into a zero-fee service. Nice.
Blockchain business after OUSD
What Open Standard lacks, and which Circle does have, is experience. Circle has executed over many years, patiently getting USDC listed on most leading exchanges, building a brand, being the champion of regulated stablecoins. The company will have to rely on these to figure out new ways to capitalize on its market position. It already has built the pieces of the machine that can make money, and must now maneuver its operations to compete.
Right now, no bank or fintech has all of these tools. So this isn’t an obituary for Circle; on the contrary, if OpenUSD really opens the floodgates for scaling stablecoins, it can win a lucrative share. But that’s a longer term vision. Right now the company must be feeling intense pressure: its stock price cratered when Open Standard announced itself.
Circle isn’t the only one whose business model will be impacted. OUSD is a test to see which chains can genuinely claim to be the “world settlement layer” for regulated money. That includes Solana, Stellar, Base, and Polygon, not to mention Tempo.
OUSD is also a massive opportunity for Solana and the like – still regarded by most people in financial institutions as suitable for DeFi but not for their regulated businesses – to get a seat at the TradFi table. Open Standard includes Coinbase, Aave, Ripple, MetaMask, OKX, Solana, and Polygon. OUSD gives them a standard dollar rail that they can integrate, both with banks as well as across crypto exchanges and wallets.
It is this standard-setting, both for crypto and TradFi, that is Open Standard’s biggest achievement. This is different from Libra, Facebook’s ambitious but doomed attempt to launch a stablecoin across all the Meta userbase. Central banks freaked out and shut it down; this also jumpstarted a hundred experiments in CBDCs which, thankfully, have mostly fizzled. OUSD, on the other hand, is being positioned as a safe tool rather than a DeFi challenge to traditional payments and lending. It’s a new SWIFT owned by all the right people, instead of a Silicon Valley flutter.
But who’s not on the logo wall? Ethereum.
Solana and others are already challenging Ethereum with much faster speeds and low fees. Ethereum has been the default global settlement rail for tokenizing real-world assets. Not, however, for payments. OUSD will make it even harder for Ethereum to compete for the payments business, and could disrupt its place in capital markets. Meanwhile the gateway into capital markets has also been opened to its competitors. Ethereum’s hotdog is getting eaten away at both ends.
What needs to happen next
It’s possible that OUSD will fail. Consortiums aren’t known for their agility, product-market fit, or convivial agreement about capital allocation. Owned by everyone can mean accountable to no one. Is this a giant DAO in the making?
Things can always go wrong. OUSD needs a lot of things to happen to succeed.
Stripe and other payment service providers need to make OUSD their default stablecoin for payouts, merchant settlements, and cross-border flows. Exchanges, DeFi venues, and crypto market makers need to treat OUSD as a primary settlement asset, which means they will build deep order books and collateral frameworks.
The biggest unknown is governance; Open Standard’s statements on this topic have been vague. Can it make decisions quickly and cleanly? Maintain regulatory and operational resilience? Operate on a pretty thin revenue base (given the money will pass through Open Standard to its shareholders)?
And can it fend off potential anti-trust or geopolitical regulatory backlash? After all, lots of big countries these days are keener on promoting their own currencies rather than allowing all of their domestic liquidity to get sucked into a US dollar equivalent.