The Stablecoin Wars as Seen Through OpenUSD

Author: Lacie Zhang, Researcher at Bitget Wallet

Introduction

Issuing stablecoins is currently the business in the financial industry that most resembles a "money printing machine," but isn't actually that profitable.

It's like a money printing machine: you collect USD from users, then buy US Treasury bonds and earn interest, while users don't receive a single penny of interest—a lucrative business that can scale infinitely with size. This is why almost everyone from banks to tech giants wants to create their own "digital dollar."

But it doesn't seem to make much money: Circle, the issuer of USDC, the world's second-largest USD stablecoin, had $1.68 billion in revenue in 2024, but its net profit margin was only about 9%, while Wall Street's consensus forecast for it in 2026 was only around 7%. A machine that seemed capable of printing money out of thin air and continuously expanding profits through scale ended up with only single-digit profit margins. Where did the missing profits go? A news report on June 30, 2026, brought the answer to the table. An independent entity called Open Standard, together with more than 140 companies including Visa, Mastercard, American Express, Stripe, BlackRock, Bank of New York Mellon, Standard Chartered, Coinbase, Ripple, Google, and Shopify, launched a new USD stablecoin, OpenUSD (OUSD). Its rules are almost the opposite of existing stablecoins: zero fees for minting and redemption, no limit on the amount, and almost all the interest earned on reserve assets, after deducting a management fee, is returned to the partners involved in distribution. Upon the announcement, Circle's stock price (NYSE: CRCL) plummeted by about 16% that day. A stablecoin that hasn't even officially launched yet, based solely on a list of partners, caused the industry's second-largest player to lose approximately $3.6 billion in market capitalization. To understand this upheaval, we must first answer the counterintuitive question: if issuing stablecoins isn't that profitable, why are these 140 giants joining in? I. The Truth About the "Printing Press": Where Does the Reserve Yield Go? Stablecoins are often described as a legal printing press: users give you $1, you issue a token pegged to $1, and then put that $1 into safe assets like short-term US Treasury bonds, earning 4%–5% interest. The stablecoins held by users do not generate interest, while the yield generated by the reserve assets belongs to the issuer. This machine is not new; it corresponds to an old concept: seigniorage. Whoever owns the right to issue currency can obtain additional revenue from currency circulation. Today, regulation has even strengthened this to some extent; the US GENIUS Act, passed in 2025, explicitly prohibits payment-type stablecoin issuers from paying interest to token holders. However, the problem is that this pie is not easily kept in the hands of the issuer. The reason isn't with any one company, but with the structure of this business: for stablecoins to have users, they need distributors, and distribution capabilities are often controlled by a few channels with user access. Take Circle, the most transparent company in the industry, as an example. Its business model is essentially a bank's net interest margin business: users exchange USD for USDC, essentially giving Circle low-cost or even zero-cost funds. Circle then invests its reserves in assets like short-term US Treasury bonds to earn interest spreads. In 2025, Circle's annual revenue was approximately $2.75 billion, with reserve interest income in the fourth quarter alone reaching $733 million, accounting for over 95% of total revenue—it's practically a company that "lives solely off interest rates." The distribution of USDC largely relies on Coinbase. According to Circle's prospectus and financial reports, Coinbase takes 100% of all USDC reserve revenue on its platform, and then splits the reserve revenue generated outside the platform 50/50. In 2024 alone, Circle paid Coinbase $908 million in distribution fees, accounting for approximately 54% of its total revenue. This means that for every dollar Circle earned, more than half went to Coinbase. Coinbase does not issue USDC, nor does it assume responsibility for reserve management, redemption, or compliance. It simply takes the most lucrative portion of the revenue from the entire industry chain, relying solely on its user access and trading platform. Even more critically, Circle cannot change this agreement. It is disclosed that it cannot be unilaterally terminated by Circle and automatically renews every three years. As the issuer, Circle does not hold the upper hand in negotiations with the largest distributor. Therefore, while stablecoin reserve revenue ostensibly belongs to the issuer, it increasingly resembles a "toll" that must be paid to the distribution channel. The issuer bears the entire burden of compliance, reserves, redemption, and regulation—a set of asset-heavy and responsibility-intensive tasks—while the bulk of the profits are taken by the channel that controls the user access. What truly begins to repric in the market is the issuer's ability to retain these profits over the long term.

II. Why Tether Earns $10 Billion: Two Stablecoins, Two Worlds

Some might argue: if stablecoin issuers truly have such weak bargaining power, why did Tether net over $10 billion in 2025, making it one of the most profitable companies globally?

This actually illustrates the key point: Circle and Tether both appear to be issuing USD stablecoins, but they are running two completely different businesses.

Tether's over $185 billion USDT is largely driven by demand from emerging markets like Argentina, Turkey, Nigeria, and Southeast Asia—markets with high inflation, foreign exchange controls, and weak banking systems. In these places, USDT is not a "crypto asset trading pair," but rather more like a "digital dollar cash."

This demand is real and inelastic. Users need US dollars, merchants need settlement, and SMEs need cross-border payments. USDT naturally becomes the most readily available and easily circulated alternative. Because of this, Tether doesn't need to pay exorbitant distribution fees to any super-channel; it can keep most of the profits generated by its reserve assets and further accumulate over $120 billion in US Treasury bonds, $17 billion in gold, and $8 billion in Bitcoin. Circle's USDC, however, lives in a different world: compliant with US regulations and adopted by institutions and exchanges. This world is more expensive, but it also forms another kind of moat—USDC is already the world's most mainstream compliant US dollar stablecoin, establishing a level of trust that USDT cannot replace in institutional funding, trading platforms, and regulatory-friendly scenarios. Both are issuing US dollar stablecoins, but Tether is collecting seigniorage, while Circle is more like paying rent to channels. This isn't about one being stronger or weaker, but rather the result of two different demand structures and two different market positioning. The difference lies not in the act of "issuance" itself, but in who controls the demand: whoever controls the real, sticky distribution scenarios controls the profits of this business. Issuance is merely the act on the surface; distribution is the key to success behind the scenes. Understanding this layer clarifies the logic behind OpenUSD's seemingly radical design. III. OpenUSD's "Ambition": Abandoning Seigniorage, Betting on Stablecoin Standards. OpenUSD did something quite counterintuitive to traditional issuers: it relinquished almost all of the "seigniorage" that issuers should have enjoyed, namely reserve returns. Some call this mechanism a stablecoin version of "government bond cashback": whoever brings in trading volume and accumulated balances can receive a share of US Treasury bond interest according to the rules. If we connect this to the previous logic, this is not difficult to understand. Reserve yields are inherently difficult to retain entirely with the issuer; sooner or later, they will flow to the distributors in various forms. Since this money will ultimately be given away, Open USD simply puts it out in the open from the beginning: not treating reserve yields as profit, but as a budget to acquire the distribution network. This is precisely the key to its design. For platforms like Stripe, Shopify, and Visa, which control merchant networks, payment scenarios, and transaction entry points, the issue has never been simply "whether a certain stablecoin can be integrated." Technical integration is not scarce; what is truly scarce is the "default entry point": which asset should be prioritized during settlement, which stablecoin should be defaulted to in merchant balances, and which standard should be prioritized in cross-border payment paths. Open USD aims to rewrite this decision-making logic: in the past, platforms chose stablecoins mainly based on compliance, liquidity, and settlement efficiency; now, there is an additional, more direct question—to whom should I direct traffic and balances, and who will share the reserve yields? This is essentially an economic incentive for the distributor, and for this reason, Circle may not, and may not need to, follow suit: it needs to reserve revenue to support its profit statement and continued investment, and it is still fulfilling its revenue-sharing agreement with Coinbase. Both models have their trade-offs. Open USD, by giving up almost all its revenue, may indeed gain a larger distribution radius; but when the issuer itself retains almost no profit, who will bear the heavy investment in compliance, liquidity, and ecosystem building in the long term? This is an unresolved question. Open USD positions itself as the "baseline currency layer of the internet economy," focusing on serving large-scale capital flows such as corporate payments and cross-border remittances. Its goal is not to issue another stablecoin, but to become the underlying standard behind stablecoin flows. However, goals are not the same as reality; standards are never written in white papers, but rather nurtured by real trading volume. The most noteworthy aspect of OUSD isn't the list of 140 partners, but rather who has the capability to truly advance it into payment, merchant, and settlement scenarios—a role that currently primarily falls to Stripe. Zach Abrams, the interim CEO of Open Standard, is also a co-founder of Bridge. Bridge, a stablecoin infrastructure company acquired by Stripe for $1.1 billion in 2024, already had an Open Issuance product, whose logic was to help companies issue stablecoins and share reserve yields. OUSD is a large-scale replication of this product logic: instead of helping each company issue its own stablecoin, it allows all participants to collaborate around the same set of yield distribution and settlement standards. Therefore, OUSD's ambition to become a standard relies not only on the narrative of a "140-partner alliance," but also on its attempt to leverage high-frequency payment gateways like Stripe to bring in real merchants, real transactions, and real capital. Standards are often formed not because everyone reaches a consensus first, but because a certain high-frequency entry point uses it first, gradually motivating other participants to adopt and follow suit. Looking at a broader framework, OUSD is attempting to redefine the value hierarchy within the stablecoin industry chain: The first layer is the reserve layer, which is the most superficial seigniorage. Reserve interest seems like the most attractive profit, but as mentioned earlier, it often doesn't stay. As long as stablecoins still need distribution channels, this money will eventually flow to the entry point in the form of revenue sharing, subsidies, rebates, or cooperation fees. It's more like a budget in the hands of the issuer, not the final prize. The second layer is the distribution layer. Whoever controls the user entry point, trading scenarios, and fund accumulation can redistribute reserve returns. The relationship between Circle and Coinbase has proven this: USDC's reserve returns nominally belong to Circle, but as long as Coinbase controls the key distribution scenarios, the bulk of the profits will be taken by the channels. The third layer is the network layer, which includes clearing rules, asset standards, and interoperability systems. At this layer, the competition is no longer about a specific stablecoin, but about who can become the underlying standard adopted by payment platforms, merchant networks, and financial applications. Whoever stands at this layer is no longer dependent on a single issuer and is less likely to be commoditized. With these three layers stacked, the difference between the two approaches becomes clear: Circle firmly occupies the first layer, is deeply integrated with Coinbase at the second layer, and is also extending to the third layer through the Circle Payments Network (CPN) and its self-built public chain Arc; OpenUSD, on the other hand, chooses to actively relinquish the first layer, using reserve returns to leverage distributors and network participants. This is OpenUSD's strategy: transforming the structural reality of "issuers not being able to retain profits" into leverage for competing for distribution and standards. However, as of press time, OUSD has not yet officially launched. The list of 140 participants primarily demonstrates the interest of payment giants and financial institutions in the new clearing network, but it does not prove that OUSD has achieved a true network effect. Network effect is the most difficult hurdle for all new stablecoins to overcome. A larger distribution radius and new clearing standards are not achieved through the announcement of a list, but rather through the gradual accumulation of real transaction volume, real balances, and real use cases. History has already provided the answer: after USDT and USDC, few new stablecoins have truly achieved large-scale adoption. PayPal's PYUSD has a market capitalization of approximately $2.7 billion, and Paxos-led consortium stablecoin USDG has only reached approximately $3 billion after three years of operation, still one to two orders of magnitude smaller than USDT and USDC, which have market capitalizations of hundreds of billions of dollars. The real moat of stablecoins lies not in "who issues them," but in liquidity and usage inertia; these cannot be replaced by a list of partners in the short term. For OUSD, the real challenge also lies in adoption depth. A company adding an "OUSD" option to its settlement system is different from actually using OUSD as the default settlement asset and channeling merchant balances and transaction volumes there. How the alliance is governed and whether partners have actual binding obligations determine the value of this "open alliance." Sustainability is another issue. OpenUSD distributes almost all reserve revenue, which does incentivize distributors, but it also means that issuers retain almost no profit. In the long run, compliance, auditing, market making, liquidity, global market expansion, and ecosystem integration are all infrastructure construction that continuously burns money. Who will pay for these costs is a question OUSD has not yet fully answered. Even more difficult is the migration cost. Getting members to actually use it essentially requires them to migrate their existing payment, clearing, and fund management processes to a new stablecoin. This involves systemic adjustments in finance, risk control, compliance, technology integration, and user habits, requiring a considerable period of adjustment. Therefore, OUSD is more like a "repricing" than a "replacement" that has already occurred. It forces the market to rethink: should the reserve returns of stablecoins belong to the issuer, the distribution channels, or the participants in the common standard? However, it will not rewrite the existing stablecoin landscape overnight, nor will it naturally lead to a unified on-chain dollar. V. The Real Battlefield: Not Issuing "Dollar," but Defining How "Dollar" Flows Now we can answer the question at the beginning. What the 140 participants want is never the profit from the distribution of stablecoin reserve returns itself, but the entry qualification that stablecoins represent: the qualification to enter the next-generation financial clearing network. The moves of the past two years have been quite clear. JPMorgan Chase launched its deposit token JPMD, PayPal issued PYUSD, and Apple, Google, and Walmart are all researching stablecoin integration. According to the Wall Street Journal, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo also plan to launch a joint tokenized deposit network through their jointly owned clearinghouse, The Clearing House, in the first half of 2027. Their aim isn't government bond interest, but rather three more fundamental things: bypassing the old clearing system, controlling accounts and data, and participating in the development of next-generation payment standards. For payment companies and banks, stablecoins are less a new business and more a ticket to success. Cross-border remittances used to go through a network of correspondent banks, taking two or three days with layers of added costs; stablecoins compress this process to seconds and near-zero cost. Fees, foreign exchange, and interest rate spreads were originally the most important revenue pillars of the payment industry, but stablecoins are dismantling them one by one. Whether participating in OUSD, issuing PYUSD, or building a bank-linked deposit network, it's essentially both an offensive and a defensive strategy: rather than having others rewrite payment rules with stablecoins, it's better to get on the table first. However, when everyone wants to be at the table, another problem arises: there are more and more "dollars" on the table. Today's on-chain dollars are no longer a single asset. USDT, USDC, OUSD, PYUSD, USDG, JPMD, and potentially future bank-linked deposit tokens are all vying for their use cases; and each stablecoin may exist simultaneously on multiple chains such as Solana, Base, Polygon, and Ethereum. The same "dollar" is split into dozens of tokens, scattered across different chains, accounts, and liquidity pools. For ordinary users and businesses, this becomes a very real question: which type of dollar should I hold? Can I use this type of US dollar to pay someone who only accepts another type of US dollar? Therefore, as the stablecoin competition progresses, the truly scarce resource may not be issuance capacity or a single point of channel, but rather the layer that allows different US dollars to be exchanged, used, and settled—that is, the liquidity layer for aggregation, routing, and clearing. This is also a greater opportunity beyond OUSD. The more stablecoins there are, the more fragmented the market becomes; the more fragmented the market, the more users need an account entry point that hides complexity in the background. Just as users today don't care which bank's deposit is behind their wallet balance when using WeChat Pay/Alipay, in the future, users using on-chain US dollars shouldn't be forced to understand whether they have USDT, USDC, OUSD, or a specific packaged version on a particular chain. This layer is precisely where on-chain wallets and accounts are closest. A wallet capable of simultaneously holding, exchanging, routing, and settling multiple USD assets can abstract the fragmented competition between issuers back into a single "dollar" in the user's eyes. Fragmentation is a war for issuers, but an opportunity for the account layer: whoever can reintegrate USD scattered across different chains, stablecoins, and liquidity pools, and continuously reduce slippage, gas volatility, and path costs during exchange, cross-chain, and settlement processes, will hold the closest and most inescapable entry point for users. Following this assessment, Bitget Wallet is exploring the product direction of a "dollar account": allowing users to hold and use USD across chains and currencies in a self-custodied account, without worrying about which stablecoin their USD is in. As a member of Open Standard, Bitget Wallet Research Institute observes this transformation, and its real concern isn't whether OUSD will become the next mainstream stablecoin, but a longer-term question: as the issuer's name becomes less important, who will become the default account for users entering the on-chain dollar world? Conclusion: For the past decade, the core story of stablecoins has been: who can legally and reliably bring dollars onto the blockchain? When 140 companies are willing to redistribute the most attractive reserve returns of stablecoins around the same set of standards, this story begins to turn a page. Issuing digital dollars is no longer a business where profits can be monopolized, but more like an entry ticket: it allows players to enter the next-generation financial clearing network, but the real value may not necessarily remain in the hands of the issuer. The new war is taking place at the level of how dollars flow, how they are settled, and how they are used by users. Whoever defines the standards, controls the clearing process, and can reassemble the scattered dollars across different chains, stablecoins, and liquidity pools into "one dollar" in the eyes of users, is closer to becoming the next generation of financial gateways. When issuing dollars is no longer profitable enough, who ultimately controls the dollar? Is it the person who prints it, the network that makes it circulate, or the account that pieces the fragmented dollars back into "one dollar"? This answer may no longer be written on any issuer's balance sheet, but rather in the network, in accounts, and in every default choice made by users.