Open USD takes on Tether and Circle: Can a new stablecoin break through?

​Tether and Circle already dominate the market for digital dollars. Now Open USD is trying to make room for another one, backed by some of the biggest names in payments and crypto. Its unusual strategy is simple: give the companies that help it grow a bigger share of the rewards.

Open USD enters a crowded market

Open USD, or OUSD, went live on Sept. 30 on Ethereum, Solana, Base, and Tempo. The stablecoin is backed by Open Standard, a new company founded by Coinbase, Mastercard, Shopify, Stripe, and Visa, while its broader network has grown to more than 200 participants.

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The five founding companies have committed more than $1 billion in near-term liquidity to help OUSD get started. That does not mean the stablecoin already has $1 billion in organic demand. The commitment can include partners holding OUSD on their balance sheets and providing liquidity to markets where the stablecoin trades.

At its core, OUSD works much like other dollar stablecoins. It is issued by Bridge, the stablecoin infrastructure company acquired by Stripe, and is designed to maintain a one-to-one value with the U.S. dollar. Its reserves are held with institutions including BlackRock, BNY, and Lead Bank.

What makes OUSD different is not the basic mechanics of the token, but what happens to the money generated by the assets backing it.

Why would anyone need another stablecoin?

Stablecoins have become an enormous business partly because of a simple piece of economics. When a company issues stablecoins, it receives real dollars in return. Those reserves can then sit in cash and short-term U.S. government securities that earn interest.

At today's scale, that income can be substantial. Tether has reported billions of dollars in annual profit as USDT grew into the world's largest stablecoin, while Circle has built much of its business around the reserves backing USDC.

But exchanges, wallets, payment companies, fintechs, and merchants also help put those stablecoins in front of users. They provide the distribution that turns a digital dollar from another token into something people can actually use. Open Standard's pitch is that the companies doing that work should participate more directly in the economics.

Open USD wants to share the money

OUSD is designed to return most of the income generated by its reserves to companies that help the stablecoin grow. Partners can be rewarded according to factors such as how much OUSD they bring into circulation and how much transaction activity they generate.

The model goes further than revenue sharing. Open Standard says companies can also earn equity in the business according to their contribution to the network. CEO Zach Abrams has said that the overwhelming majority of the company's eventual ownership is intended to be distributed among founders and other participants based on their role in OUSD's growth.

Abrams summarized the idea more simply: “Every other stablecoin is building a fund. We're building money.”

Paxos's Global Dollar Network, built around the USDG stablecoin, also shares reserve economics with companies that help distribute it. OUSD, however, is beginning with an unusually powerful collection of companies already sitting between consumers, merchants, banks, and digital money.

Why the companies behind OUSD matter

The names behind OUSD help explain why the launch is attracting attention. Visa and Mastercard already connect enormous networks of merchants and financial institutions. Shopify sits between millions of businesses and their customers. Stripe processes payments for companies around the world, while Coinbase provides a direct route into crypto markets.

Those connections could give OUSD something that most new stablecoins struggle to acquire: distribution from day one. Stripe has previously said OUSD would become its default stablecoin for businesses, although the company continues to support other stablecoins as well.

The broader Open Standard network also includes banks, fintech companies, exchanges, wallets, and other payment businesses. Instead of persuading consumers one by one to adopt a new digital dollar, OUSD is trying to persuade the companies that already handle their money to put it in front of them.

Tether and Circle already have the users

Stablecoins become more useful as more people use them, which gives USDT and USDC an advantage that a new entrant cannot immediately replicate. USDT is deeply embedded in crypto trading, particularly outside the U.S., and is available across exchanges, wallets, blockchains, and decentralized finance. USDC has built its own extensive network of integrations and increasingly sits at the intersection of crypto markets and traditional finance.

That creates a familiar chicken-and-egg problem. Businesses are more likely to support a stablecoin when customers already want it, while customers have little reason to switch unless the places where they move money already accept it. OUSD's incentives are designed to address that problem from the business side: a company that can earn more by helping OUSD grow has a reason to integrate and promote it.

But availability and demand are not the same thing. Coinbase, Visa, Mastercard, and Stripe already work with other stablecoins, including USDC, and their involvement with OUSD does not mean those relationships disappear. Businesses may ultimately support several digital dollars rather than asking customers to choose one.

What would success actually look like?

Trying to catch USDT or USDC in circulating supply may be the wrong way to measure OUSD. Its more natural test could be whether businesses actually start moving money with it.

Merchant settlement, cross-border transfers, treasury operations, and transfers between platforms are all areas where OUSD could find a role. If the companies behind Open Standard integrate it deeply enough into products people already use, customers may not even need to make a conscious decision to “switch” stablecoins.

Open Standard can reward companies for integrating OUSD and provide the liquidity needed to get the system moving. But challenging Tether and Circle will ultimately depend on something it cannot distribute as an incentive: whether businesses actually find OUSD useful enough to keep moving money with it.