Circle's Value Drops 13% Amid Rival Stablecoin Launch

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4 sourcesFirst reported 21 days agoUpdated 21 days ago

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Circle's stock fell by 13% following news of a new stablecoin initiative.
Major companies including Stripe and Coinbase are backing the Open USD project.
Open USD aims to create competition against Circle's USDC and Tether's USDT.
The new stablecoin is expected to allow partners to retain reserve earnings.
Analysts highlight challenges in building a network for the new stablecoin.

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Circle's stock fell by 13% following the announcement that several major financial companies, including Stripe, Coinbase, and BlackRock, are backing a new stablecoin initiative called Open USD. The consortium aims to launch later this year and has garnered support from notable firms such as Visa, Mastercard, US Bank, and Google. This new stablecoin is positioned to compete directly with Circle's USDC and Tether's USDT, the two largest stablecoins by market capitalization.

Open USD seeks to provide its partners with opportunities to retain reserve income and eliminate minting fees, potentially disrupting Circle's existing business model. While the backing of prominent financial institutions may enhance Open USD's credibility, analysts suggest that the network will face significant challenges in achieving widespread adoption and effectively competing in the crowded stablecoin market.

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Circle's Value Drops 13% Amid Rival Stablecoin Launch

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