CryptoJul 10, 2026
Why the Stablecoin Market Is Suddenly the Most Contested Corner of Finance
Digital Currency
Rhea Lobo
Discover
The stablecoin wars just entered a new phase. New competitors are emerging, traditional finance is moving in, and insiders are cashing out, signaling a power shift in who controls digital dollars.
Open USD launched recently backed by Visa, BlackRock, Alphabet, and Coinbase, among more than 140 companies.
Unlike Circle's USDC or Tether's USDT, Open USD shares nearly all reserve income with distribution partners rather than keeping it with the issuer.
The model eliminates minting and redemption fees to attract banks, payment firms, and exchanges. If stablecoins become interchangeable, the companies routing transactions may end up worth more than the companies issuing the tokens.
"This is squarely aimed at issuers like Circle who think they are going to keep all the revenue," said Austin Campbell, adjunct professor at NYU Stern School of Business.
Open USD is not guaranteed to succeed. Global Dollar, a similar consortium backed by Robinhood and Kraken, has signed up more than 100 members but holds a market value of only ~$3B.
USDC sits at ~$73B. Mastercard is hedging by backing both Open USD and Global Dollar. The real test, according to Moody's Ratings VP Stephen Tu, is whether partners actually route meaningful volume through Open USD rather than just listing it as another option.
Circle has received OCC trust bank approval from the US Office of the Comptroller of the Currency. The new entity, Circle National Trust, allows Circle to directly manage the reserves backing USDC rather than relying on third-party banks and custodians.
The charter does not allow Circle to take deposits or make loans like a commercial bank. What it does do is place Circle under a single federal regulator instead of 50 state-level ones.
That simplifies compliance for international counterparties and lowers the barrier for institutional investors to use Circle's infrastructure, according to Circle's chief strategy officer Dante Disparte.
The approval also has a legal dimension. Under the recently passed GENIUS Act, which established a federal framework for payment stablecoins, large issuers like Circle are required to obtain an OCC charter.
Recent OCC actions have included approvals or applications from Coinbase, BitGo, Fidelity Digital Assets, Ripple, and Paxos.
Circle CEO Jeremy Allaire argues the threat from Open USD is overstated. USDC handled nearly 80% of dollar-denominated stablecoin transaction volume on public blockchains in the first quarter of 2026.
Tens of thousands of products and services integrate with USDC, Allaire says. He also notes that several Open USD backers, including Coinbase, remain active USDC partners.
Allaire pushed back on the revenue-sharing model directly. Distributing almost all reserve income to partners may attract early users but risks leaving too little capital to maintain global stablecoin infrastructure over time, he argues.
He also pointed out that large coalitions of companies with competing commercial interests rarely move quickly.
While Circle fights on two fronts, Tether has its own internal signal to process. Richard Heathcote, Tether's former chief investment officer, is selling part of his 1.26% stake through PJT Partners. Tether has approved the transaction.
USDT has $184B in circulation and the company reported more than $10B in profit last year.
Tether paused a broader fundraise earlier in 2026 as it awaits results from its first full financial audit, conducted by one of the Big Four accounting firms.
