Circle tumbles as BlackRock backs rival revenue-sharing stablecoin

Circle Internet Group shares have dropped more than 17% after a consortium backed by BlackRock, Google, Visa, Coinbase, and more than 140 other companies unveiled a competing revenue-sharing stablecoin.

According to Yahoo Finance market data, Circle closed at $62.65 on Tuesday, down 17.52% from the previous session after falling as low as $62.52 during intraday trading. The stock opened at $72.25 and extended losses throughout the day before stabilizing near its session low.

Trading volume climbed to more than 34.5 million shares, well above its average daily volume of about 14 million, as investors reacted to the latest development in the stablecoin market.

Open USD introduces a different revenue model

The selloff followed the launch of Open USD (OUSD), a new stablecoin developed by Open Standard, an industry initiative led by Bridge co-founder Zach Abrams. The network is backed by more than 140 companies, including BlackRock, Google, Visa, Coinbase and other financial and technology firms seeking to build shared stablecoin infrastructure.

Unlike traditional issuer-led models, Open USD offers fee-free minting and redemption while distributing most reserve income to participating ecosystem members. Governance will also be handled by an independent partner-led organization instead of a single issuing company.

The structure directly challenges one of Circle’s core business models by allowing ecosystem participants to share reserve income that has traditionally accrued to stablecoin issuers. The design is similar to the incentive framework used by Paxos’ Global Dollar Network, which also shares reserve revenue with partners.

Open USD enters the market as stablecoins continue to expand beyond crypto trading into cross-border payments, merchant settlement and corporate treasury management. Growing institutional interest has encouraged multiple companies to launch new dollar-backed tokens with different economic models to attract banks, payment firms and fintech platforms.

Circle says competition will not slow USDC expansion

Responding to the announcement, Circle Chief Executive Officer Jeremy Allaire dismissed suggestions that the new entrant poses a significant threat to USDC, arguing that the stablecoin sector is large enough to support multiple successful issuers.

According to Allaire, Circle will continue expanding USDC’s institutional network by adding banking, payment, and capital markets partners while investing in infrastructure that improves interoperability across blockchain networks.

Allaire added that Circle plans to keep building on additional blockchain networks while integrating USDC more deeply with banks, payments companies, capital markets firms and enterprises. He also said the company intends to expand opportunities for partners to participate economically in the continued growth of the USDC ecosystem.

Although Circle maintains that its long-term strategy remains unchanged, Tuesday’s market reaction showed investors closely watching how new revenue-sharing models could influence competition in the fast-growing stablecoin industry.

With Open USD backed by some of the largest names in finance and technology, the launch introduces another well-funded rival as issuers compete for institutional adoption and payment market share.