web3: Foreign media: Open USD impacts Circle's revenue model
The Cryptonomist
07-22 03:15
Ai Focus
Following the launch of OpenUSD, the market began to re-evaluate Circle's business model, which relies on USDC reserve returns.
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Following the launch of the Open Standard Consortium's stablecoin OpenUSD, the market's initial reaction was not to its adoption prospects, but rather to the pressure on Circle's profitability. Foreign media outlets believe that Circle's stock price, which fell by 15% to 18% at one point, reflects investors' concerns not that USDC will immediately lose users, but rather that its revenue structure, reliant on reserve interest, is facing more direct competition.

The profit-sharing model directly targets core revenue.

The article states that Circle's main revenue source is relatively clear: issuing USDC, holding corresponding dollar reserves, and earning interest generated from these reserves. This model can generate substantial revenue during periods of high interest rates; however, its appeal will diminish if competitors share these profits with banks, payment platforms, and distribution channels.

OpenUSD operates on this very principle. The report notes that the project doesn't emphasize creating a completely new currency, but rather attempts to reshape the way profits are distributed within the stablecoin ecosystem. Unlike the traditional model where issuers retain the majority of reserve profits, OpenUSD tends to distribute profits more broadly among ecosystem participants.

The article also mentions that OpenUSD reportedly offers free minting and redemption services, further compressing the additional revenue that issuers can obtain. Foreign media believe that this open and more aggressive profit-sharing strategy is its most obvious difference from the USDC model.

The list of more than 140 institutions is questionable.

The Open Standard consortium listed over 140 organizations at its launch, encompassing payment companies, crypto platforms, and asset management firms, including Visa, Mastercard, Stripe, Coinbase, and BlackRock. The list alone quickly garnered market attention.

However, the article also points out that some of the companies on the list gave more cautious accounts of their level of involvement. According to South Korean media reports, a Samsung Electronics representative stated that the company had not conducted formal consultations and was unaware of its specific role. Dunamu and K Bank indicated that related contacts remained at the preliminary intention stage. Other companies reportedly only learned of their inclusion on the list after South Korean media reported on it.

This means there is still a significant gap between the lineup of institutions announced by the alliance and the actual level of participation. Foreign media believe this will affect the market's assessment of the speed of OpenUSD's progress.

Payment giants each have their own strategies

The article argues that OpenUSD is more like a payment network deployment than a simple stablecoin replacement. Its logic is similar to Visa's network model: instead of relying on high profits from a single transaction, it aims to enable more transactions to be completed on the same infrastructure, and then profit from scale.

Within this framework, Bridge, the stablecoin infrastructure company backed by Stripe, is considered a key implementer. Foreign media reports suggest that after Stripe acquired Bridge, stablecoin infrastructure has been integrated into a broader fintech ecosystem, and OpenUSD may represent a step towards extending its reach into enterprise payments and quasi-banking services.

Coinbase's involvement has also been interpreted as a form of hedging. While Coinbase and Circle have a close relationship on USDC, Coinbase could also benefit if OpenUSD opens up new markets in internet payments or corporate settlements. For Coinbase, this involvement is low-cost yet retains more options.

Visa and Mastercard, on the other hand, play a more settlement-layer role. The article points out that neither company aims to encourage direct consumer use of stablecoins, but rather to gain a foothold in card issuance, acquiring, and inter-institutional settlement. If stablecoins are increasingly used for back-office clearing in the future, they still hope to control key infrastructure.

The market first reassesses profit margins

Foreign media believe that the market's sell-off of Circle shares is not an assessment of whether OpenUSD has achieved widespread adoption, but rather an anticipation of the possibility that the model of stablecoin issuers exclusively retaining reserve revenue may no longer be stable in the future.

If models like OpenUSD are adopted by more payment institutions, trading platforms, and businesses, the competition among stablecoins may shift from user scale to revenue sharing. For Circle, the real pressure doesn't necessarily come from short-term churn, but rather from the market beginning to reassess the profit margins of the USDC business model.

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