Circle Stock Crashes 17% as Stripe, Coinbase and BlackRock Back Rival Stablecoin

Circle’s stock just had its worst day in months — and the company that hit it isn’t even public yet.

On Tuesday 30 June 2026, shares in Circle (CRCL) tumbled more than 17% to a four-month low after a consortium of over 140 companies — including Stripe, Coinbase, Mastercard, Visa and BlackRock — unveiled a rival stablecoin called Open USD. For UK investors watching the stablecoin space, or anyone holding USDC, this is the moment the market stopped treating Circle as untouchable.

What Actually Happened to Circle

Circle shares closed below $63 on Tuesday. That’s the weakest price since late February, and down 55% from where the stock sat in mid-May. Brutal stuff for a company that only recently looked like the poster child of regulated stablecoins.

The trigger was Open USD — a new stablecoin launched by an independent company called Open Standard. Its founding partners read like a who’s-who of payments and banking: Stripe, Coinbase, Mastercard, Visa and BlackRock, backed by more than 140 businesses spanning fintech, banking and crypto.

I’ve watched a few “Circle killer” stories come and go. Most fizzled. This one’s different because of who signed up.

A Quick Recap: How Circle Got Here

Circle floated on the US markets in 2025 riding a wave of stablecoin optimism, helped along by the GENIUS Act clearing US federal stablecoin rules and giving issuers like Circle a clear regulatory lane. For a while, USDC looked like the “safe”, regulated choice that banks and institutions could partner with without worrying about a Tether-style opacity problem.

That regulatory head start was Circle’s biggest asset. The trouble is, regulation only protects you from regulators — it does nothing to stop a consortium of your own biggest partners deciding to build their own version of the thing you sell them.

That’s precisely what happened this week. Stripe, Coinbase, Mastercard and Visa were meant to be Circle’s distribution network. Now three of the four are launch partners on a direct competitor.

The Mechanics: How Open USD Actually Works

Strip away the branding and Open USD is a fairly simple idea executed at unusual scale. Partners can mint and redeem tokens without paying fees — something Circle and most issuers still charge for at volume. More importantly, reserve income gets shared back to participating businesses, minus a management fee, rather than being retained entirely by a single issuer.

Governance is shared among members too, not controlled top-down by one company. In practice that means the banks, fintechs and payment firms backing Open USD get a vote in how the network evolves, plus a cut of the yield their own reserves generate.

Compare that to how Circle actually earns money: it takes the dollars backing USDC, invests them in short-term US Treasuries, and keeps almost all of the resulting interest. When you’re holding tens of billions in reserves, that interest income is not a rounding error — it’s the core of the business model.

Why This Actually Threatens Circle’s Business Model

Here’s the bit that matters, and it’s not complicated once you strip the jargon out.

For a bank or a payment processor choosing between USDC and Open USD, the maths just changed. Why hand your reserve yield to Circle when you could keep a slice yourself? Shopify, Google, IBM, Mercado Pago, Fireblocks, Anchorage Digital and MetaMask are all named launch partners alongside crypto infrastructure names like Aave, Solana, Polygon and Ripple.

That’s not a niche crypto project. That’s most of the payments industry showing up at once, choosing to build shared rails rather than rent Circle’s.

Zach Abrams, co-founder of Bridge — the stablecoin infrastructure firm Stripe acquired back in 2024 — leads the project. His quote on launch was blunt: “Existing stablecoins have great strengths, but to use them at scale, businesses need something that’s open, low-cost, high-throughput, broadly accessible, and aligned to their interests.” Translation: USDC works, but Circle keeps the money.

Open USD Isn’t Actually the First of Its Kind

Worth being honest here: this model already exists. The Global Dollar Network (USDG), led by Paxos, does something similar — it shares reserve income with partners including Robinhood, Kraken and Galaxy Digital.

Over in Europe, a group of banks and payment providers launched Qivalis, a euro-denominated stablecoin venture built on the same shared-infrastructure logic. Financial institutions clearly want to build the plumbing themselves rather than rent it from a single issuer.

What makes Open USD different is scale. USDG built momentum gradually over roughly two years. Open USD launched with Visa, Mastercard, Stripe, Coinbase and BlackRock already on board — 140+ companies on day one is a different order of magnitude, and it arrived faster than most analysts expected.

How Big Is the Stablecoin Market, Really

Context matters here. The stablecoin market has grown past $300 billion, and Citi projects it could hit $4 trillion by 2030. That’s not a rounding error — that’s a market banks, fintechs and payment giants all want a piece of.

USDC currently sits at roughly $73 billion market cap, positioned as the “regulated” option for institutions. Tether’s USDT dominates with about $145 billion in circulation, built mostly on crypto trading and emerging-market payments rather than institutional plumbing.

Once stablecoins move past $300bn and start powering cross-border payments, merchant settlements and corporate treasury operations — not just crypto trading — the fight stops being about who issues the token. It becomes about who owns the rails underneath it. That’s exactly the fight Open USD just picked, and the $4 trillion projection is why 140 companies decided it was worth building an alternative rather than just using Circle’s.

Circle’s Response Was Measured — Maybe Too Measured

Circle CEO Jeremy Allaire downplayed the threat in an X post: “Stablecoins represent one of the largest market opportunities in the world as the internet transforms the infrastructure for storing and moving money. We welcome continued innovation and competition in the space and look forward to remaining laser-focused on building the best stablecoin infrastructure possible and driving more customer and partner success.”

Fine words. But a 17% single-day drop and a stock down 55% since mid-May tells a different story about how the market read the announcement.

UK investors keep asking about this because Circle listed with a lot of retail enthusiasm behind it, and a lot of that enthusiasm assumed USDC’s dominance was close to permanent. Open USD is the clearest signal yet that it isn’t.

The Bigger Picture: This Is an Infrastructure War, Not a Product Launch

It’s tempting to read this as “new stablecoin launches, old stablecoin wobbles” — another product cycle story. That undersells what’s actually going on.

Visa and Mastercard didn’t win payments by having the best cards. They won by owning the network everyone else had to plug into. Open USD’s backers — many of whom compete fiercely with each other in every other part of their business — are doing the same calculation here. Rather than let one company (Circle) own the settlement layer for digital dollars, 140+ firms have decided to co-own it themselves.

That’s a much harder thing for Circle to compete with than a rival product. You can out-market a competitor. It’s far tougher to out-compete an entire industry that’s decided to build the plumbing collectively and split the proceeds. Whether Open USD succeeds commercially is still an open question — plenty of consortium projects have launched with fanfare and quietly stalled. But the intent behind it is a genuine structural threat, not just noise.
**What This Means for UK Investors**

If you’re holding CRCL shares through a US-focused broker, this is a name to watch closely rather than panic-sell on a single news cycle. Stock swings on competitive threats often overshoot before settling — but the underlying issue, reserve income sharing, is structural, not a one-off headline. A 55% fall since mid-May suggests the market had already been pricing in weakness before Open USD even confirmed the rumours.

For UK crypto users generally, the more interesting angle is regulatory. The FCA’s stablecoin regime opens for applications from September 2026, and the Bank of England already dropped its controversial £20,000 stablecoin holding cap earlier this year. Both moves suggest UK regulators are preparing for stablecoins — plural, competing, multiple issuers — rather than a Circle-or-Tether duopoly.

Open USD and USDG both list crypto infrastructure names — Solana, Polygon, Ripple, Aave — among their partners, which matters if you use any UK-facing wallet or exchange built on those rails. If Open USD gains real traction, expect UK exchanges to start offering it alongside USDC within months, not years — that’s usually how fast integration moves once the underlying rails exist.

On tax, HMRC currently treats stablecoin swaps the same as any other crypto disposal for Capital Gains Tax purposes — moving from USDC to Open USD would, in most cases, still count as a taxable event. Worth remembering before assuming a “stablecoin swap” is tax-neutral just because both sides are pegged to the dollar.

Nobody knows yet whether Open USD actually captures meaningful volume — plenty of “Circle killers” have promised big and delivered little. But the list of names behind this one is long enough, and heavyweight enough, that dismissing it outright would be a mistake.

This article is for educational purposes only and does not constitute financial advice. Cryptocurrency investments involve significant risk. Always do your own research.