Open USD Emerges as Significant Challenge to USDC, According to CoinShares

USDC’s circulating supply has declined to roughly $73 billion, down from nearly $80 billion in March, reducing its portion of the approximately $312 billion stablecoin market amid growing competition from newly regulated issuers.

Circle’s shares dropped by more than 17% on the announcement of Open USD, although CoinShares noted that the decline was probably exacerbated by technical selling associated with the Russell index reconstitution.

Nevertheless, the report suggested that the market may be overreacting. Open USD has not yet launched, and several key details remain unresolved; however, Circle maintains a substantial advantage through USDC’s deep liquidity and extensive integrations across exchanges, DeFi platforms, and payment systems.

The report added that Open USD is unlikely to present a major threat to Tether, whose dominance in emerging markets and offshore dollar liquidity provides USDT — the largest stablecoin by a wide margin — with a distinct competitive moat.

For now, investors should monitor whether Circle alters its distribution strategy and whether Open USD can translate its high‑profile backing into genuine adoption, CoinShares said. Until such developments occur, the project remains a credible yet unproven challenge to USDC.

CoinShares is not the only firm highlighting Open USD’s challenge. Japanese investment bank Mizuho lowered its rating of Circle to underperform from neutral and cut its price target to $50 from $85 in a client note on Tuesday, contending that the new competitor’s business model jeopardizes Circle’s long‑term economics.

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