Originally from Circle Founder & CEO Jeremy Allaire
Compiled by | Odaily Planet Daily Qin Xiaofeng (@QinXiaofeng 888 )
Editor's Note: On June 30, the stablecoin project Open Standard, backed by 140 globally renowned companies, was officially announced. It plans to launch a new US dollar stablecoin, Open USD (OUSD), later this year, directly targeting Circle (USDC). The stock price of Circle (NYSE: CRCL) plunged over 17% at one point, drawing complaints from investors. Jeremy Allaire, the Founder & CEO, could no longer sit idly by and published a lengthy article to boost confidence.
He stated that the stablecoin market is "winner-takes-all." USDC, with nearly a decade of building application integrations, global liquidity, and regulatory compliance, has consistently maintained a dominant position. OUSD's propositions of free redemptions, revenue sharing, and a consortium model are unrealistic and may undermine infrastructure investment and efficiency. Influenced by this news, Circle's (NYSE: CRCL) stock price rebounded by 4% on July 1 before finally closing down 1.09%.
Below is an integration of two recent tweets by Jeremy Allaire, compiled by Odaily Planet Daily. Enjoy~
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We've received many questions from the investor community seeking our perspective on OUSD, so I want to share my views directly here.
Stablecoin networks are platform-type, network-effect businesses. This kind of business requires long-term accumulation and tends towards a "winner-takes-all" market structure, similar to other internet platform-type utility markets. Numerous factors drive this phenomenon.
First, stablecoin networks effectively function as internet public protocols and software layers. The strength of such a network depends on the number and scope of applications and services integrated into it. Each time a developer or service provider integrates into the network, it brings more network effects, attracting even more developers, adding more utility and network effects, ultimately driving demand for the digital currency itself, and further reinforcing these advantages through liquidity network effects.
We have achieved this on a large scale with the current USDC network—tens of thousands of service integrations. This not only provides immense utility for each application but also offers great convenience to all users, who benefit significantly from the existing reach and interoperability. This further shapes user and developer preferences. We've spent nearly a decade building this ecosystem, and the process is now accelerating as mainstream institutions join the network, connecting their customers and users.
We further enhance and extend the network by building a software stack—protocols like CCTP and Gateway that facilitate interoperability, security, and liquidity globally. This expands the target reach for application builders and developers, allowing them to easily tap into the existing liquidity and network effects. Now, we are seeing this software stack being introduced to various chains, permissioned L2s, government-built networks, and many more scenarios.
Second, liquidity network effects are fundamental. Liquidity begets liquidity. For a stablecoin to achieve scale and utility, it must possess high liquidity—both in the primary market (e.g., having top-tier direct banking liquidity via major global financial centers) and the secondary market, meaning accessible, tradable liquidity for retail and institutional clients across regions, connectable to various global fiat instruments. Those who want to acquire and transfer value must be able to easily enter and exit the digital currency.
In this regard, we've spent nearly a decade building liquidity, and it is now deeply embedded across numerous institutions: exchanges, DeFi platforms, payment service providers (PSPs), payment companies, regional exchanges, and more. Establishing these liquidity network effects also involves building global regulatory infrastructure to ensure the stablecoin's usability under different regimes worldwide. Today, USDC is among the top three most liquid digital assets globally, with a significant gap over later entrants. BTC, USDT, and USDC all possess extremely high liquidity. The next closest USD stablecoins are roughly only one-tenth the size of USDC, and their liquidity is often concentrated in a single exchange's order book. In contrast, USDC's liquidity is widely dispersed across dozens of different platforms. Building this liquidity has been our task for nearly a decade, and it continues.
Third, network effects stem from deep integration with policy and regulatory environments. In many cases, this is the result of years of effort to obtain licenses (for instance, USDC is currently the only major global stablecoin usable throughout Europe or Japan). Moreover, more stablecoin regulatory frameworks are being enacted—Circle ensures USDC is at the forefront of obtaining official recognition, registration, licensing, and acceptance in the world's most important markets. Behind this is also the establishment of a global banking, reserve management, treasury, and liquidity management system capable of operating nearly 24/7 in global markets and banking systems. This global effort is a massive engineering project we've been investing in for years.
All these investments by Circle and our global ecosystem of thousands of partners ultimately result in providing the world's most trusted, most accessible digital dollar infrastructure—a utility that any user, developer, or business can freely and easily access, and we have no intention of slowing down.
All these factors compound, ultimately reflected in the data. According to third-party analytics firm Artemis, which tracks stablecoin adoption, in Q1 2026, USDC processed nearly $30 trillion in on-chain transaction volume, accounting for 80% of all USD stablecoin transactions on blockchains. USDT processed the remaining 20% of transactions. All other USD stablecoins combined processed 0% of the volume (i.e., less than 0.5%). While other stablecoins may have some circulating supply, much of it comes from promotions and incentives, with extremely limited actual usage—because the liquidity and network utility of those coins are exceptionally limited.
The above content not only outlines the strengths of the Circle network but also highlights the unavoidable challenges any new entrant faces. Of course, I've also heard many voices suggesting OUSD does many things better than USDC.
(1) Free minting and redemption. There's a view that existing stablecoins charge redemption fees, and payment companies shouldn't bear these costs (although the entire payments industry is built on charging small bps fees at various network on/off-ramps). There is a structural market reality—some stablecoins charge extremely high redemption fees and have limited redemption facilities—the effect of which is that stablecoins with good redemption facilities, ample liquidity, and no fees become the off-ramp for competing stablecoins. Saying "offer unlimited free redemptions" sounds easy, but market realities may force a change in behavior. Circle has addressed this precisely through contractual mechanisms rather than blanket fee waivers, and it's already solved.
(2) Win-win for all, shared revenue. This sounds wonderful, but market realities are quite different. Today, Circle shares the majority of its revenue with distribution partners and continues to aggressively expand partnerships with leading companies across industries. However, we also retain significant revenue to invest in the large-scale market infrastructure that makes this network a powerful and valuable utility that builders globally can rely on. Giving away all revenue is akin to "starving" the infrastructure, leading to systemic underinvestment, which inevitably limits the platform's breadth. (Odaily Note: In Q1 2026, Circle's revenue was $694 million, with distribution expenses of $407 million, accounting for 59%.)
Furthermore, Circle believes the future stablecoin market could be orders of magnitude larger than today. We are actively bringing more partners into the USDC ecosystem through diverse and growing partnership models, covering exchanges, custodians, payment companies, asset issuers, and more. We are happy to continue building with a "Big tent mentality," allowing the entire ecosystem to create value together. (Odaily Note: "Big tent mentality" is a political and organizational strategy where a party, company, or institution includes diverse, even opposing, views and factions to attract the broadest group, seeking common ground while reserving differences to gather maximum support or market share.)
(3) Consortium where everyone has a voice. Perhaps my view is somewhat pessimistic, but the track record of consortium-based products in achieving scale, product-market fit, or even basic product agility is absolutely disappointing. While there are indeed examples of financial consortiums operating utilities, they are often slow-moving. Large corporate groups coordinate poorly, have misaligned incentives, slow down progress, and rarely create space for truly enduring innovation and competitiveness. Moreover, they often act in their self-interest, leaving the consortium itself under-resourced at the operational level.
We actually experimented with this approach in USDC's early days. Even with few participants, we encountered countless challenges and complexities. Smaller, tighter strategic collaborations and commercial arrangements, led by product and platform builders who can move independently, almost always outperform large consortia. But often when such consortia are formed, everyone feels they should list their logo, make a statement, and loudly proclaim openness. However, these companies usually ultimately turn to their operational units to make the best decisions for their clients—which often means partnering with market leaders to build lasting win-win relationships.
There have also been many comments about Circle's partnership with Coinbase and what it all means. Our stablecoin partnership with Coinbase remains as strong as ever, and I believe we both see enormous opportunities to expand the USDC network.
One final additional point: Circle remains deeply committed to supporting a wide range of products and infrastructure, even where we may compete with partners' products in certain business areas. We work closely with many of the founding members of OUSD, and we expect these members will continue to be important partners and clients for USDC. At the same time, as Circle diversifies our product and platform stack, expanding into many areas like Arc, CCTP, CPN, StableFX, Agent Stack, etc., we are also expanding collaboration and cooperation with dozens of other stablecoin issuers, helping them issue on Arc, leverage our interoperability infrastructure, gain support in our wallets, and become settlement and FX options on CPN and StableFX.
We are steadfast in our belief in the growth of the stablecoin ecosystem and welcome OUSD as a new member of the community.
