Why OpenUSD's 'real threat' that tanked Circle stock still faces a steep uphill battle for adoption
Key takeaways
- Some went as far as to call it an "existential threat" to Circle, whose business model relies primarily on retaining the interest earned on the assets backing USDC.
- "The marquee partner names clearly suggest a real threat to Circle's business," Rob Hadick, general partner at venture capital firm Dragonfly, told CoinDesk.
- Others are more cautious in their take, at least for now.
The Open Standard, backed by more than 140 companies including Stripe, Coinbase, Visa, Mastercard and BlackRock, immediately attracted attention because it attacks one of Circle's key advantages: its network of institutional partners. Some went as far as to call it an "existential threat" to Circle, whose business model relies primarily on retaining the interest earned on the assets backing USDC. OUSD, by contrast, would distribute that yield to partners rather than keep it for the issuer.
"The marquee partner names clearly suggest a real threat to Circle's business," Rob Hadick, general partner at venture capital firm Dragonfly, told CoinDesk. He added that Stripe's broad suite of financial products could give the consortium an edge by allowing it to "uniquely undercut Circle's economics."
Others are more cautious in their take, at least for now.