Circle Internet Group had a rough start to the week. The USDC issuer watched its stock crater as much as 18% on Monday after a coalition of corporate heavyweights announced Open USD, a new dollar-pegged stablecoin designed to undercut Circle’s entire revenue model. By Thursday, shares had clawed back much of the loss, but the message from the market was clear: Circle’s near-monopoly comfort zone just got a lot less comfortable.
The sell-off wiped out billions in market value intraday, a rather dramatic response to a stablecoin that hasn’t even launched yet. But when the consortium behind it includes Visa, Mastercard, Stripe, Coinbase, BlackRock, BNY, Google, and Shopify, among more than 140 total firms, the market’s nerves start to make sense.
What Open USD actually changes
Here’s the thing about Circle’s business. It’s beautifully simple, almost suspiciously so. The company holds reserves backing USDC, parks those reserves in US Treasuries, and collects the interest. That interest income accounts for roughly 96% of Circle’s total revenue. USDC’s market cap sits at approximately $73 billion, which means we’re talking about a substantial pile of Treasuries generating substantial yield.
