Author: Rob Hadick, Dragonfly Partner
Translation: Luffy, Foresight News
I believe the core takeaway that can be distilled from the launch of OUSD is actually quite complex. It will have a differentiated impact on the three stablecoin issuers Circle, Tether, and Paxos, and at a more macro level, it will also alter the adoption trajectory of the stablecoin sector.
Let's first talk about Circle (stock ticker: CRCL), the company behind USDC. At the same time OUSD was officially announced, Circle's founder Jeremy was attending the largest and most hyped Goldman Sachs Digital Assets Summit in history. It's hard to dismiss this as mere coincidence. Before the stock market opened, Jeremy, Goldman Sachs, and most attendees on-site were already aware of this announcement and understood it would negatively impact the company's stock price. This point itself is not crucial, but the on-site details are quite telling: during Jeremy's live interview, attendees were discussing the OUSD news, and CRCL's stock price dropped 6% during the interview.
In terms of business impact, it has been clear for some time: revenue-sharing ratios for distribution channels will continue to rise, and redemption fees for stablecoins in payment scenarios will eventually be phased out. Circle has been preparing for both trends, securing agreements with various payment companies for stablecoin minting and redemption, and negotiating revenue-sharing mechanisms with distribution channels.
Signals of a potential split between Circle and Coinbase have been circulating for a while. If it materializes, it would almost immediately double their net revenue, which is very favorable for them. That said, over a reasonable timeframe, a significant portion of these gains will likely flow to new distribution partners. However, freed from the constraints of the Coinbase partnership, CRCL would gain full autonomy to compete aggressively for market share, unbound by previous terms. Therefore, even though the net share of revenue the company retains will continue to face pressure, as long as the partnership is restructured or terminated, the overall outcome remains a net positive. Additionally, Circle has built a deeply integrated, high-liquidity underlying infrastructure that is difficult to replicate. This core strength should not be overlooked or dismissed as trivial.
But it's equally clear that for many of Stripe's partners, customers, and ecosystem participants, if OUSD can foster sufficient liquidity depth, it will likely become the default choice, replacing the previously favored USDC. It's also undeniable that Stripe possesses stronger overall technical R&D and product development capabilities. They will likely launch more comprehensive derivative tools and supporting products, significantly lowering the operational barriers to stablecoin integration and distribution.
Looking at it another way, CRCL holds a significant first-mover advantage and an existing integration base, which should not be ignored. Switching costs might not be high, but if you've already built a product on CRCL's API, you need an incentive to switch. This is more difficult than people imagine and doesn't depend solely on profit-sharing. Of course, the untapped incremental market not yet covered by current major players is far larger than the existing mature market. Meanwhile, for non-payment application scenarios, or for payment companies that are in direct competition with Stripe and have completely different interests, OUSD shows no absolute advantage over existing stablecoins or newly launched competitors.
Finally, if OUSD is ultimately issued by an entity under Bridge, the core pain point that has long prevented USDC from deeply penetrating large enterprise clients remains unresolved. To this day, stablecoins of this nature are essentially credit liabilities of the issuing entity, and neither CRCL nor Bridge possesses an investment-grade credit rating. Bridge also has not yet completed compliance modifications under the envisioned "GENIUS Stablecoin Act," although the team is reportedly working on preparations.
The industry landscape would fundamentally shift only if Stripe's parent company or another collaborating entity could provide a guarantee; without such a backstop, large banks and asset management institutions would likely enter directly, capturing the most profitable and largest enterprise-level business scenarios. Additionally, significant work remains in applying for and securing compliance licenses across different global jurisdictions. Therefore, I do not believe this OUSD launch eliminates the pre-existing competitive risks in the industry.
Overall, before yesterday's announcement, I and others predicted that CRCL's stock price would drop 15% to 20% that day, and the actual decline fell squarely in the middle of that range. I believe the market's negative reaction was fully justified, but I don't agree with many commentators interpreting this as the death knell for Circle's decline.
However, CRCL does need to accelerate the R&D and iteration speed of its payment and fintech products. I also believe the company needs to fill business gaps through mergers and acquisitions. With the stock price now lower, it may have missed the optimal window for M&A, but there are still many potential value-adding acquisition targets in the market. New entrants won't disappear, so proactively deploying defensive strategies and solidifying its moat is crucial.
For Tether, this isn't their core market anyway. They will continue to focus on the down-market segments that neither Stripe nor Circle prioritizes, so their overall business is largely unaffected. But as Tether CEO Paolo stated publicly at Token 2049 a few years ago: in the long run, Tether's market share will likely continue to decline, but the overall size of the stablecoin industry will experience significant growth.
As for Paxos, the impact of this event is much more severe. The competitive advantage underpinning Paxos's core product, USDG, will be significantly weakened, and its long-held lead in regulatory compliance will gradually erode. Compared to the other two issuers, the launch of OUSD poses a more existential threat to Paxos. This is also the core reason Paxos has pivoted its strategic focus entirely towards its broker-dealer BaaS (Banking-as-a-Service) business over the past year.
