USDC’s circulating supply has fallen to around $73 billion from nearly $80 billion in March, trimming its share of the roughly $312 billion stablecoin market as competition from newly regulated issuers intensifies.
Circle shares fell more than 17% on the day Open USD was announced, although CoinShares He said the decline was likely amplified by technical selling tied to the rebuild of the Russell index.
Still, the report argues that the market may be overreacting. Open USD has yet to launch, important details remain unresolved, and Circle retains a significant lead thanks to USDC’s deep liquidity and years of integrations across exchanges, DeFi, and payments.
Open USD is unlikely to pose a major threat to Tether, whose dominance in emerging markets and offshore dollar liquidity gives USDT, the largest stablecoin by far, a different competitive moat, the report added.
For now, investors should watch to see if Circle changes its distribution strategy and if Open USD can convert its high-profile endorsement into adoption, CoinShares said. Until then, the project remains a credible, but unproven, challenger to USDC.
CoinShares is not alone in pointing out the challenge posed by Open USD. Japanese investment bank Mizuho downgraded Circle to underperform from neutral and cut its price target to $50 from $85 in a note to clients on Tuesday, arguing that the new rival’s business model threatens the stablecoin issuer’s long-term economics.
