Circle: Open USD launch by a consortium of 140 partners - Our thoughts

Research evidence excerpt

Circle: Open USD launch by a consortium of 140 partners - Our thoughts

Gautam Chhugani +91 226 842 1416 gautam.chhugani@bernsteinsg.com 1 July 2026

Further, the OUSD design flips the model of stablecoin reserve economics retained by the issuer (Circle, Tether) to a model

where the economics are shared between the partners (formula unclear but probably based on some contribution formula

linked to usage/distribution). If OUSD gains distribution and scale, it is feared Circle would retain lower reserve earnings in the

future as it may be forced to share more with its distribution partners.

Our views and specific impact on Circle :

1. Validation of stablecoin as a category: First, if 140 partners across payments, tech, banking & financial services are

throwing their weight behind launching a competitor to Circle, it is an unprecedented validation of stablecoins as the disruptive

new business model on the verge of mainstream financial services adoption. We believe, stablecoins are way past the ‘solution

looking for a problem’ era. Stablecoins are ready for production across the integrated payments and financial system.

2. Circle is the dominant stablecoin network but multiple winners possible: We believe stablecoin issuance is a network

business. Eventually, the stablecoin network with the largest distribution, partner network and liquidity will win but there

could be more than one stablecoin winners. An open permission-less stablecoin financial system could see multiple layers of

competition from banks, payments and tech players who enjoy massive mainstream distribution beyond crypto. Today however,

Circle’s USDC is the leading and dominant stablecoin network. Circle is ~28% of the stablecoin monetary base (Exhibit 2), but