Circle drops 16% after Open USD launch backed by industry giants

Circle shares fell up to 16% after Open USD’s launch, backed by 140+ major firms. Investors fear for USDC’s dominance, though some analysts say the sell-off is overdone.

Circle Internet Group shares plunged between 13% and 16% after the announcement of Open USD, a new stablecoin supported by over 140 major companies, including Visa, Mastercard, BlackRock, Stripe, American Express, and Coinbase. Open USD introduces features such as free minting and redemption, revenue sharing from reserves, and collaborative governance, directly challenging USDC, Circle’s flagship stablecoin. The launch sparked concerns among investors about Circle’s ability to maintain its leading position in the enterprise stablecoin market. This led to increased trading volume and a reassessment of Circle’s valuation. Despite the sharp sell-off, some analysts argue that the market reaction may be overblown, maintaining that USDC’s established reputation and network effects are difficult to replicate. The arrival of Open USD could reshape the stablecoin sector, but uncertainties remain regarding its adoption and the true impact on USDC’s market share.