CRCL
New rival, same money pot
Circle had a rough Tuesday, tumbling 17% after a 140-company coalition rolled out Open USD, a stablecoin built to share reserve yield with distribution partners instead of letting Circle keep the whole pie. If that sounds like a direct shot at Circle’s business model, that’s because it basically is.
Circle says about 99% of its revenue comes from interest on USDC reserves, so anything that changes who gets paid on stablecoin flows is not exactly a minor footnote. Open USD is aiming at the exact cash cow that keeps the lights on.
Bernstein’s take: calm down
Bernstein, though, isn’t treating this like the end of the world. The firm reiterated its outperform rating and held its $190 price target, arguing the new product is more of a validation moment for stablecoins than a death blow to Circle.
It also pushed back on the idea that Coinbase would fully defect, noting the exchange currently gets roughly half of USDC reserve income under its distribution deal with Circle. In other words: why ditch a good thing just to start from scratch?
The partnership drama gets messy
The awkward part is that some of the same names tied to USDC distribution — including Coinbase, BlackRock, and Visa — are also linked to the Open USD effort. That’s enough to make the whole thing feel like a business breakup where everyone still has a shared Netflix account.
Circle CEO Jeremy Allaire tried to cool the nerves on X, saying USDC still dominates dollar stablecoin transactions and that big consortiums tend to move like molasses in January. His bigger point: if you give away all the reserve income, you may not have much left to reinvest in the network.
Why investors should care
The stock reaction tells you the market is treating this as a real competitive threat, not just crypto theater. Even if Bernstein is right and Open USD helps expand the stablecoin market, the winner matters a lot when one company’s revenue engine depends so heavily on who captures the yield.
Big picture: Circle isn’t just fighting for users — it’s fighting for the economics underneath the entire stablecoin stack.