Original | Odaily Planet Daily (@OdailyChina)

Author｜Azuma（@azuma_eth）

The stablecoin track has welcomed a truly heavyweight new player.

On the evening of June 30, Beijing time, a new company called Open Standard announced that it will launch a new U.S. dollar stablecoin, Open USD, which will be officially launched later this year.

Who is Open Standard? Probably no one had heard of it before today. The real key message is thatOpen USD is accompanied by a list of partners that covers 140 companies - Visa, Mastercard, Stripe, Adyen in the payment sector, financial institutions BlackRock, BNY, DBS, Standard Chartered, Mizuho, technology representatives Google, Shopify, IBM, as well as Coinbase, OKX, Bybit, Ripple, Fireblocks, MetaMask Leading institutions in the cryptocurrency industry are among them, covering multiple fields such as payment, banking, Internet and digital assets.

Open Standard stated that the goal of Open USD is to create a stable currency "for global capital flows" and provide enterprises with a lower-cost and more open on-chain USD infrastructure.

After the news was announced, the capital market responded quickly. The share price of stablecoin issuer Circle (CRCL) fell 17.55% in a single day, the largest drop in recent times. The market generally believes that the launch ofOpen USD means that the stablecoin industry has finally ushered in a truly competitive new challenger.

What is the difference between Open USD?

At first glance, Open USD does not seem to be much different from USDC and USDT. It is also a stable currency anchored to the value of the US dollar, and it also has an over-collateralization model. However, in terms of issuance and operation mechanisms, Open USD has made several completely different designs, and these design points seem to be somewhat aimed at Circle...

First, there is zero-cost Mint and Redeem.

Open USD officially stated that corporate users can complete the issuance and redemption of stable coins with no limit and zero fees, and there are no additional scale restrictions. For payment institutions and financial institutions that need to handle large-amount fund flows, this means lower capital usage costs and lowers the access threshold for stablecoins as payment infrastructure.

Secondly, and most importantly - the income generated from the reserve assets will belong to the partners.

This is the biggest difference between Open USD and existing mainstream stablecoins. Currently, most stablecoins, including USDC, allocate the U.S. dollars deposited by users into low-risk assets such as U.S. Treasury bonds. The interest income generated is mainly owned by the issuer, which is also one of Circle's most important sources of profit.

Open USD adopts a completely different model. Officials stated that the revenue generated from stablecoin reserves will be returned to partners by default, and Open Standard only charges a small management fee to cover daily operating costs. In other words, the reserve income that was mainly exclusive to the issuer in the past will be redistributed to the entire ecological participants.

Finally, there are changes in cooperative governance methods.

Open USD is not independently operated by a single company, but is managed by Open Standard, with partners forming a board of directors to participate in future development directions and major decisions.

Officially calls this model "Neutral Governance" (neutral governance), hoping to build Open USD into an open industry infrastructure rather than a product belonging to a certain company.

Circle faces a real enemy

In the past few years, there have been many stablecoins trying to challenge USDC, but most of them have been unable to truly shake Circle's market position. The reason is simple. The biggest moat of stablecoins has never been technology, but trust, compliance and adoption.

In terms of compliance, Circle has long actively embraced regulation and is one of the most mature stablecoin issuers under the US regulatory framework; in terms of adoption, USDC has been widely accessed by Coinbase, Visa, Stripe, Robinhood and a large number of exchanges, wallets and payment institutions, forming a clear network effect. For latecomers, it is not difficult to just issue a new stablecoin. What is really difficult is to make the entire industry willing to use it.

But the situation of Open USD is different. Different from stablecoins that relied on a single company in the past and needed to be promoted from scratch, Open USD has had a luxury cooperation list covering the payment, banking, Internet and encryption industries since its birth. Visa, Mastercard, Stripe, BlackRock, Coinbase, Google, Shopify and other companies themselves are the most important potential users and promoters of stablecoins.

More importantly, many of these companies are originally important participants in the USDC ecosystem. For example, Coinbase and Circle have maintained a long-term and in-depth cooperation, and both parties jointly promote the development of USDC; and payment giants such as Stripe and Visa have also been important promoters of the implementation of stable currency payments in recent years.

Now that these companies have collectively joined Open Standard, it undoubtedly means that Open USD has stood at a much higher starting point than ordinary new projects in terms of compliance, channels, and adoption rates. For Circle, this may be the real challenge.

One of the biggest advantages of USDC in the past is that it is almost the default choice for institutions to enter the on-chain US dollar system. However, when a large number of heavyweight players jointly choose to start over and create a new set of open standards, the market will also begin to re-evaluate a question - If a company can obtain similar compliance capabilities, similar network coverage, and share the income generated by stable currency reserves, why should it continue to help Circle build the USDC network?

CRCL plummeted by more than 17%, can I still get it?

After the official announcement of Open USD, Circle (CRCL) stock price plummeted by more than 17% last night - in addition to the competitive pressure of Open USD, CRCL's expulsion from Russell is another key negative factor.

FTSE Russell has removed Circle (CRCL) from five major Russell Growth Index benchmarks in its latest annual index reorganization. This is a direct blow to institutional holdings.

Considering that Open USD will not be released until later this year, USDC’s market share will not suffer a sharp impact in the short term.But the real concern of the market is whether the moat formed by USDC’s past first-mover advantage, compliance system and liquidity network is still stable?

The emergence of Open USD has caused the market to re-evaluate Circle's business model - When companies can jointly issue stablecoins and share reserve income, can Circle continue to exclusively enjoy the dividends brought by the growth of stablecoins?

These questions may not yet have answers, but CRCL's plunge has illustrated the possibility that capital markets have begun to repricing.

As a holder of CRCL, I will not choose to reduce my position when FUD sentiment is prevalent, but I will definitely re-evaluate my expectations for this operation after CRCL stabilizes.