Open Standard's 'shared stablecoin' goes live

• Key insights: OpenUSD, a new stablecoin from a consortium of more than 140 banks, fintechs, payments companies and crypto firms, is now live.
• What's at stake: The stablecoin's shared-economics model gives banks a financial incentive to use the stablecoin, and OpenUSD's success would pressure existing issuer models. 
• Forward look: Companies are able to build on OUSD through BVNK, Coinbase, Stripe and the Visa Stablecoin Platform. 

Open Standard's anticipated OUSD stablecoin is live, three months after the initiative was first announced. The launch comes less than a week after Open Standard formalized its governance structure, founding partners and leadership.

"Stablecoins should be better money. Today, they fall short. OUSD is built to change that," Open Standard CEO Zach Abrams said in a post on the social network X. Top use cases for the digital currency include settlement, institutional trading, corporate treasury, and fintech and neobank infrastructure, according to Abrams. 

Open Standard is a consortium of more than 140 banks, fintechs, payment companies and crypto firms. Its stablecoin has attracted the attention of banks such as BNY, U.S. Bank, Huntington Bank, Citizens Bank, Cross River, The Bancorp, Pathward, and Lead Bank thanks to its shared-economics model, which rewards network participants based on the volume they drive across the network rather than assets under management. 

That structure differentiates the stablecoin from existing issuer models popularized by Circle and Tether, and helps to encourage partner engagement, according to Keybanc analysts. 

"We believe Circle would be most negatively impacted by OUSD success, and we think it's important to consider market share both in terms of supply and transaction volume provided Circle's increasing emphasis on payments and Open Standard's transaction-oriented model," Keybanc analysts said in a research note.

"We expect usage data and commercialization efforts to be the most meaningful [near-term] catalysts for interpreting sector implication," Keybanc said. "The economic construct of OUSD should in theory allow for payments/fintech platforms to benefit, but use cases and supply/volume dynamics need to firm up to better understand this." 

Companies are able to build on OUSD through Mastercard's BVNK, Stripe (where OUSD will be the default stablecoin) and the Visa Stablecoin Platform. Building on Coinbase will begin on Oct. 1. 

Mastercard, Visa, Stripe and Coinbase are the founding partners of Open Standard, and provided $1 billion of initial liquidity for the stablecoin. 

"For a new stablecoin, liquidity on day one determines what businesses can actually do with it," Tempo Chief Business Officer Dan Romero told American Banker in an email.

OUSD reserves are held at BNY, Lead Bank and BlackRock. Bridge issues the stablecoin. 

As the stablecoin market continues to mature following the passage of the GENIUS Act, banks have taken a broad approach to testing the digital asset. Citizens' strategy has been to cast a wide net rather try to pick a winner, Paul Busby, the bank's head of commercial bank strategy, previously told American Banker. And U.S. Bank, which is part of the Open Standard consortium, has also been testing its own stablecoin.