The issuer of the USDC stablecoin has collapsed: Visa and Mastercard are creating a competing token

Shares of Circle Internet Group, the issuer of the second-largest stablecoin—USDC—plummeted by more than 16% during trading on June 30, Barron’s noted. Investors reacted to an announcement by technology and payment companies—including Visa and Mastercard—regarding the formation of a consortium to create a new stablecoin called Open USD.

The project, called Open Standard, will bring together more than 140 companies to create a new stablecoin network that will compete with USDC. It plans to launch a new stablecoin pegged to the U.S. dollar, called Open USD. The launch is expected later this year. The project’s goal is to accelerate the use of digital tokens worldwide by removing the barriers businesses face when scaling the adoption of stablecoins, according to Open Standard (as quoted by Reuters).

“Existing stablecoins offer significant advantages, but for them to be adopted on a large scale, businesses need something that is open, affordable, high-performance, widely accessible, and aligned with their interests,” said Zach Abrams, co-founder and head of Open Standard.

Open USD can be created and exchanged without any fees or volume limits, Open Standard noted. Revenue from the new stablecoin’s reserves will be distributed among the project’s partners—after deducting a management fee to cover operating expenses, Open Standard stated.

In addition to payment companies, the initiative's partners include asset managers such as BlackRock; technology companies such as Alphabet and IBM; and crypto companies such as Ripple and Coinbase.

Stablecoins are a type of cryptocurrency whose value is typically pegged to the U.S. dollar and backed by reliable assets, such as bank deposits or Treasury bonds. For many years, USDC, created jointly by Circle and Coinbase, has been one of the largest stablecoins in the U.S. As of Tuesday, the amount of USDC in circulation stood at about $73.6 billion, Barron’s notes, emphasizing that the new project could directly threaten this dominance.

The publication notes that Coinbase’s subscriptions and services segment, which included revenue tied to USDC, accounted for 44% of the company’s total revenue in the first quarter. USDC also remains Circle’s flagship product, despite the company’s expansion into a wider range of services.

In response to the imminent launch of yet another stablecoin on the market, Circle stated that the company welcomes competition in this sector. Coinbase also welcomed the launch of the new project. The company noted that “the more issuers [of such tokens] there are, the more use cases there will be—and the wider their adoption.”

Circle and other crypto companies have been banking on the use of stablecoins in everyday life, as Barron's points out. Circle, for example, has recently been promoting them for potential payments made through AI agents. In general, stablecoins are traditionally used to trade Bitcoin and other cryptocurrencies. They have also become widespread as a low-cost alternative to money transfers and an easy way for consumers in countries with high inflation to protect their purchasing power.

This article was AI-translated and verified by a human editor