Circle CEO Jeremy Allaire defended USDC’s competitive position Wednesday after the launch of Open USD sent shares of the stablecoin issuer down 17.5% in the previous session.

We’ve had lots of questions from our investor community looking for thoughts on OUSD, and so I thought I’d share my direct views here for anyone.

Stablecoin networks are platform and network effect businesses that are established over a long period of time, tend towards…

— Jeremy Allaire – jerallaire.arc (@jerallaire) July 1, 2026

Circle closed Tuesday at $62.63 after Open Standard unveiled OUSD, a dollar stablecoin backed by more than 140 companies including Visa, Stripe, Mastercard, BlackRock and Coinbase. Shares recovered about 4% Wednesday morning, trading near $65 at press time.

Open USD is expected to go live later this year. Businesses will be able to mint and redeem the token at no cost and without volume limits. Participating companies will receive the earnings generated by OUSD reserves after a management fee, while governance will sit with an independent company overseen by its partners.

In response to questions from Circle investors, Allaire argued that stablecoin markets are shaped by liquidity, integrations and network effects developed over long periods rather than by the number of companies supporting a product at launch.

He pointed to USDC’s presence across exchanges, banks, payment companies and decentralized finance platforms, as well as Circle products such as CCTP and Gateway, as infrastructure built over nearly a decade.

Allaire also questioned whether OUSD’s free minting and redemption model could be maintained under real market conditions. He said Circle already uses commercial agreements to reduce costs for large partners without introducing a blanket fee exemption across the network.

The executive was similarly critical of OUSD’s plan to return nearly all reserve earnings to participating businesses. Circle shares most of its income with distribution partners, Allaire said, but retains enough revenue to invest in compliance, liquidity and infrastructure.

Circle generated $653 million in reserve income during the first quarter, while distribution, transaction and other costs reached $407 million. OUSD directly challenges that model by shifting a larger portion of reserve economics toward the companies distributing and using the token.

Allaire also expressed doubts about OUSD’s consortium structure, arguing that large groups of companies often face conflicting incentives, slow decision making and limited product flexibility. Circle initially operated USDC through a consortium but encountered persistent complexity, he said.

The comments addressed Coinbase’s participation in Open Standard. Coinbase remains one of Circle’s most important USDC partners, despite also joining the group backing OUSD. Allaire said the relationship remains strong and that many OUSD participants are expected to continue using Circle’s products and infrastructure.

Allaire cited Artemis data showing that USDC processed nearly $30 trillion in transactions during the first quarter and represented about 80% of dollar stablecoin activity. Circle’s quarterly results separately reported $21.5 trillion in USDC onchain volume and a 63% share based on Visa Onchain Analytics.