Open USD Is Already Hurting Circle

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TOP NEWS THIS WEEK

• 140 Companies Launch Open USD to Challenge Circle
• Securitize Tokenizes Its Own NYSE Stock on Day One
• Robinhood Ships Its Own Chain

ALSO IN THIS ISSUE

• Cloudflare Opens a Stablecoin Paywall for the Agent Web
• New York Life Puts Junk Bonds On-Chain
• JPMorgan's Kinexys Crosses $4 Trillion
• Kraken Opens a Pre-IPO Token for Bending Spoons
• Binance and Anchorage Split Custody From Execution
• and more

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STABLECOINS / MARKET STRUCTURE

140 Companies Launch Open USD to Challenge Circle

On June 30, a consortium of more than 140 companies launched Open USD, a US-dollar stablecoin whose reserve income and governance flow to the businesses that use it, not to the issuer. It's operated by Open Standard, an independent company led by Bridge co-founder Zach Abrams, and Stripe says OUSD will be the default stablecoin for businesses on its platform. Circle's stock fell more than 17% on the news.

What makes OUSD different from USDC or USDT:

• Partners keep almost all the earnings on the reserves, after a small management fee.
• A board of partner companies governs it, with no single issuer in control.
• Minting and redemption are free, at any volume.

A selection from the 140-plus, by category:

We made the case last summer that issuance itself is commoditized, so that a stablecoin’s real advantages are liquidity and distribution. Now look at who signed; they are distributors: card networks, banks, fintechs, exchanges, wallets, the companies that move dollars and choose which token rides their rails. In stablecoins, that has always been where the money is.

Case in point, Circle already hands Coinbase about 54 cents of every dollar it earns just to sit on Coinbase's platform. The other 139 companies did that math and realized they don't need to out-distribute USDC next quarter to change Circle's economics in their favor. They only need to make the alternative real, because from the moment it exists, Circle negotiates every distribution deal against it.

Jeremy Allaire's rebuttal argues that USDC's edge, is a decade of compounding network effects:

• thousands of developer and app integrations;
• the deepest liquidity of any regulated dollar token;
• licenses in the EU and Japan that rivals don't have;
• roughly $30 trillion moved on-chain in Q1, about 80% of all dollar-stablecoin volume.

Columbia's Omid Malekan calls the launch "logo spray and pray", "putting your name on a list is easy; actually changing corporate behavior is hard." M0's Luca Prosperi shrugs it off as "Global Dollar on Stripe's execution engine." They're probably correct that 140 owners will ship slowly, if ever, and the precedents aren't kind:

• Facebook's Libra, killed by regulators once it became a single target;
• Paxos's consortium-backed USDG, crawled to about $3 billion in three years;
• the steady run of big-name launches (Stripe and Paradigm's Tempo chain among the latest) that arrive on a wave of press and then either become real infrastructure or sit idle, which is what e.g. bank consortia usually do.

All true, and all of it might protect USDC's usage rather than Circle's margin. OUSD doesn't have to pull volume away from USDC to squeeze Circle; being a plausible alternative is enough to cap what Circle keeps at the next distribution deal renewal. Circle can hold its share and watch its take-rate shrink at the same time.

Coinbase is the stress test. In its arrangement with Circle:

• 100% of the yield on USDC held in Coinbase, plus 50% of the rest;
• close to a fifth of Coinbase's total revenue, by Bernstein's estimate;
• up for its three year renewal this quarter, with Coinbase on both the USDC payroll and the OUSD backer list.

Dragonfly's Rob Hadick made the contrarian case that losing Coinbase would actually help Circle: it would roughly double net revenue overnight and free the company to strike its own distribution deals, even if that yield leaks back out to new partners later. He may be right, and that's the point. Whether Circle keeps Coinbase or loses it, the reserve income becomes a pass-through.

OUSD is unproven on every axis that counts: There's no launch date, and consortium liquidity is the hardest thing to bootstrap in this market. Any of that could keep OUSD small for years. None of it changes what it already did to Circle's pricing power.

Circle’s move

The float was always the prize, and it still is: reserve income was 94% of Circle's first-quarter revenue. Take that away and a stablecoin franchise is worth whatever the software on top of it can earn: payments, FX, agentic settlement, the Arc, CPN, and StableFX products Circle is now racing to ship. Circle's real task is to turn into an infrastructure company before its float income is competed away.

Have a happy 4th of July! 🇺🇸

Chris — The Defiant Contributing Editor, Partner at Storaker Advisory

OTHER STORIES WORTH YOUR TIME

Securitize Tokenizes Its Own NYSE Stock on Day One

Securitize started trading on the NYSE under SECZ on July 2 and, the same day, tokenized its own newly listed stock — the first newly public company to bring its shares on-chain at the start of its life as a listed issuer. Tokenized SECZ, live on Avalanche and Solana, is the same common stock trading on the NYSE, not a synthetic wrapper, and is expected to be the largest tokenized stock at launch. Securitize is the RWA leader with more than $4 billion tokenized across funds run with BlackRock, Apollo, KKR, BNY, and Hamilton Lane, and it holds an MoU with the NYSE on transfer-agent standards. "There is no stronger validation... than tokenizing our own public stock on Day 1," CEO Carlos Domingo said, calling it "a blueprint for public companies."

Robinhood Ships Its Own Chain

Robinhood put Robinhood Chain, an Arbitrum-based L2, into production on July 1 and stacked products on top: Stock Tokens in 120-plus countries (not the US), on-chain lending via Morpho (Robinhood Earn, ~7% APY on USDG), perps, and agentic crypto trading. The catch is legal form — Robinhood's Stock Tokens are tokenized debt securities that track a price without conferring ownership, the same structure that drew an OpenAI rebuke last year, where Securitize's SECZ is the real equity. Read together, the two mark the shift: the tokenizers are now public companies building their own rails.

Cloudflare Opens a Stablecoin Paywall for the Agent Web

Cloudflare, which carries roughly a fifth of global internet traffic, opened a waitlist for a Monetization Gateway that lets customers charge for any page, dataset, API, or MCP tool behind its network, with payments settling in stablecoins over the x402 protocol. The framing is that AI agents are replacing human visitors, breaking subscription pricing — an agent reads a page or calls an API once rather than holding a monthly account. Enforced at Cloudflare's edge before a request reaches the origin, it targets the sub-cent-payment problem, and it follows AWS wiring Coinbase's x402 into CloudFront in June. Jeremy Allaire called it "a big win for data providers and publishers."

New York Life Puts Junk Bonds On-Chain

New York Life Investment Management, an $807 billion asset manager, partnered with Centrifuge to launch HYB, a tokenized U.S. high-yield corporate bond portfolio — its first tokenized product and one of the first junk-bond strategies on-chain. Subscriptions and redemptions settle in USDC, with NYLIM keeping the portfolio and risk management and Centrifuge providing the rails. Tokenized RWAs have leaned on Treasuries and private credit; extending onto sub-investment-grade corporate debt aimed at stablecoin issuers, DeFi users, and DAO treasuries pushes the asset set up the risk curve. NYLIM joins Apollo and Janus Henderson on Centrifuge's roster.

JPMorgan's Kinexys Crosses $4 Trillion

JPMorgan's Kinexys blockchain passed $4 trillion in cumulative transactions — more than $7 billion a day — and added five Asia-Pacific currencies (AUD, HKD, JPY, CNY, SGD), extending 24/7 settlement to the region's biggest corridors. The permissioned model settles only between whitelisted counterparties inside JPMorgan's compliance framework, its explicit selling point against open stablecoins: no new counterparty risk, no KYC gap, settlement inside a bank the client already uses. Against the OUSD fight, it is the other pole of the digital-dollar market — bank-issued money scaling on private rails while the consortium chases public ones.

Kraken Opens a Pre-IPO Token for Bending Spoons

Kraken's xStocks is letting EEA and select-market customers register non-binding interest in the Bending Spoons IPO — the Italian conglomerate behind WeTransfer, Evernote, and Vimeo, filing on Nasdaq as BSP — with allocations delivered as BSPx, a 1:1 tokenized share tradeable from listing day. It is xStocks' second pre-IPO offering after SpaceX, a rollout that drew criticism when exchanges canceled allocations after xStocks failed to deliver shares to some users. US, UK, Canadian, and Australian residents are excluded. The pitch is retail access to pre-IPO equity on-chain; the open question is delivery.

Binance and Anchorage Split Custody From Execution

Binance and Anchorage Digital launched off-exchange settlement, letting institutions trade against Binance's liquidity while their assets stay in Anchorage's federally chartered custody and move only at final settlement — the custody-execution separation TradFi has used for decades. Institutions can pledge crypto, cash equivalents, and tokenized RWAs including BlackRock's BUIDL, Circle's USYC, and Franklin Templeton's iBENJI as collateral. It is the first live use of off-exchange settlement inside Anchorage's Atlas, which is also extending into non-custodial DeFi venues.

Even more this week:

Warren Moves to Bar Trump-Family Crypto Profits — Senator Warren pushed legislation to bar the Trump family from crypto profits following a reported $1.4 billion disclosure, sharpening the ethics fight that has stalled the CLARITY Act.

SEC Opens a 60-Day Window on 'Novel' ETF Rules — The SEC opened comment on proposed rules for novel ETFs as prediction-market and other unconventional fund filings pile up.

OKX and Coinbase Race for Binance's EU Users — With Binance winding down some EU services ahead of the MiCA deadline, OKX and Coinbase are racing to sign up displaced European users.

BNY Adds USDC to Institutional Custody — The world's largest custodian made USDC the first stablecoin on its Digital Asset Custody platform, letting clients hold, mint, and redeem it alongside traditional assets.

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Converge is produced by The Defiant. This briefing is for informational purposes only and does not constitute investment advice.