Allaire: USDC’s network effects hard for Open USD to match

Circle CEO Jeremy Allaire welcomed the Open USD consortium into the stablecoin market while arguing that long-term adoption depends on integrations, liquidity and infrastructure rather than fee levels or consortium governance.

In a lengthy post on X, Allaire described stablecoins as platform-like products whose value increases as more developers, businesses and financial institutions integrate them. He pointed to thousands of existing USDC integrations that he said expand liquidity and interoperability and create reinforcing demand for the token.

Allaire outlined infrastructure Circle has developed, including the Cross-Chain Transfer Protocol (CCTP) and Gateway tools, and cited years of work on global banking relationships, regulatory licensing and reserve management. He said these elements make it difficult for new entrants to match USDC’s infrastructure quickly.

The post referenced data from blockchain analytics firm Artemis showing USDC processed nearly $30 trillion in on-chain transactions in the first quarter of 2026. Allaire noted that figure represented about 80% of dollar-denominated stablecoin transaction volume for the period, with USDT at roughly 20% and all other dollar stablecoins combined at less than 0.5%.

Much of his critique addressed Open USD’s design choices, including fee-free minting and redemption, shared reserve economics and consortium governance. Allaire argued that headline fee policies do not determine actual redemption behaviour or liquidity dynamics in the market. He added that Circle already shares a majority of its income with distribution partners while keeping enough revenue to continue investing in infrastructure.

Allaire questioned the effectiveness of large consortium-led governance, saying groups of many large companies can face competing incentives and slower decision-making. “We actually tried this in the early days of USDC,” he wrote, adding Circle found smaller strategic partnerships more effective than broad industry consortia.

On Coinbase’s role, Allaire sought to reduce speculation, writing that the companies’ partnership around USDC “remains as strong as ever” and expressing confidence that many Open USD founding members will continue to use USDC alongside the new network.

He closed by welcoming Open USD to the market and describing Circle’s ongoing work to expand interoperable infrastructure that supports multiple issuers and broader stablecoin activity.