Coinbase Backs Open USD, Deepening Stablecoin Split

Coinbase joined a consortium of more than 140 financial, technology and crypto firms backing Open USD, a proposed stablecoin that aims to return most interest earned on reserves to the platforms that distribute it. The announcement coincided with a 16% drop in Circle’s shares on the day the consortium was revealed.

The consortium named Visa, Mastercard, Stripe, BlackRock and Google among its backers. The group said businesses would have free minting and redemption and that the project’s revenue model would shift most reserve income toward distribution partners.

Open USD, or OUSD, is proposed as a distributor-first stablecoin designed to allocate the bulk of yield on reserve assets to companies that handle customer flows and transactions. Backers say the model will reward platforms that onboard users and provide liquidity rather than concentrating yield with token issuers.

Coinbase has been a major distributor of USD Coin, or USDC. In its first-quarter report the exchange said more than 25% of USDC in circulation — roughly $19 billion on average — was held across its products. Coinbase also reported that its Base network processed 62% of global on-chain stablecoin transaction volume during the quarter.

Under the firms’ existing revenue-sharing arrangement, Circle paid Coinbase $908 million in 2024. Analysts estimate Coinbase’s stablecoin-related revenue in 2025 was about $1.35 billion, roughly 19% of the company’s total revenue that year. The distribution agreement between Coinbase and Circle runs on a three-year cycle and is next set to expire in August 2026.

Coinbase CEO Brian Armstrong commented that the firm is “excited to advance the adoption of stablecoins” and to help “update the global financial system.” Industry analysts said Coinbase’s role in OUSD gives it commercial leverage as the companies approach their next contract renewal.

Circle’s CEO Jeremy Allaire pushed back publicly, defending USDC’s liquidity and integrations and citing data that USDC handled nearly $30 trillion in on-chain transaction volume in the first quarter of 2026, about 80% of dollar-denominated stablecoin transactions across major blockchains. Allaire added: “Large groups of large companies coordinate poorly, have misaligned incentives, slow things down and rarely create the space for real durable innovation and competitiveness.” He warned that a zero-fee model could leave issuers without capital needed for licensing, compliance and continuous treasury management.

Analysts flagged operational and regulatory hurdles for OUSD. Lorenzo Valente, director of research for digital assets at ARK Invest, noted new stablecoins face cold-start problems because markets and trading infrastructure currently center on established pairs such as USDT and USDC. Valente also raised the prospect of regulatory and antitrust scrutiny for a widely backed corporate issuance. A venture investor, Kayla Phillips, questioned how governance and incentives would work across more than 140 founding members and whether all participants would commit to supporting the network.

Current stablecoin issuers hold customer cash in short-term government securities and keep the interest earned on those reserves. Open USD’s proposed structure would reallocate most of that reserve yield to distribution partners. Circle and other incumbents say retained reserve income supports licensing, compliance and 24/7 treasury operations. Observers noted the announcement has focused market attention on how reserve income is shared between issuers and distribution platforms, the operational challenges of launching a new token, and potential regulatory review.