Big payment firms, banks and fintechs add heft to Open USD stablecoin

• Key insights: More than 140 banks, fintechs, payments companies, and crypto firms have backed a new stablecoin venture, Open Standard, which will issue a dollar-backed stablecoin called Open USD. 
• What's at stake: Stablecoins have been waiting for their mainstream moment following the passage of the Genius Act, and Open Standard's shared incentive structure and open governance framework could be the first step toward ushering greater adoption of the technology. 
• Forward look: Open USD is slated to launch later this year.  

More than 140 banks, fintechs, payment companies, and crypto firms are teaming up for a new stablecoin venture that, if successful, could be a catalyst for wider adoption. 

BNY, Huntington Bank, U.S. Bank, American Express, Visa, Mastercard, Stripe, and Coinbase are just a few of the companies that have backed the new stablecoin venture called Open Standard. Open Standard will issue a dollar-backed stablecoin, Open USD, later this year. 

Adyen, Affirm, Klarna, Chime, Google, Capital One's Brex, Standard Chartered, Chime, Nuvei, Ramp, Marqeta, Shopify, and Remitly are also part of the endeavor. 

"Stablecoins are the most important thing happening in payments right now, and we're committed to giving our customers access to the best options available – including Open USD and beyond," Shan Aggarwal, Coinbase's chief business officer, said in a statement. "The more great infrastructure this industry builds together, the faster we close the gap between what payments are today and what they should be." 

Open USD, which is slated to launch later this year, is designed to be blockchain agnostic, and will initially run on Coinbase's Base blockchain, etherium, Solana and Tempo. Businesses can mint and redeem Open USD at no-cost, and partners will receive all of the proceeds from the stablecoin's reserves minus Open Standard's management fees. 

Open Standard will function as an independent company with a board made up of the company's partners. Zach Abrams, co-founder and CEO of Bridge, which was acquired by Stripe for $1.1 billion, will be Open Standard's interim CEO. 

Open Standard's shared incentive structure and open governance framework could be the first step toward ushering greater adoption of the technology because it helps align incentives between disparate companies and makes stablecoin interoperability less of a constraint to wider adoption, according to Keybanc analysts. 

"Execution remains a question as prior consortium efforts have little to show, but we see the breadth of partners, aligned incentives, and neutral governance as important factors for successful scaling and compelling catalysts for broader stablecoin adoption," Keybanc analysts said. 

Shares of Circle Internet Group — the issuer of USDC, the second-largest stablecoin in circulation — tumbled, falling more than 16%, or $12.35, to $63.62 as of 2:30 p.m. in New York on Tuesday. 

"Stripe is really coming for Circle," Kevin Lehtiniitty, CEO of stablecoin orchestration network Borderless.xyz, told American Banker. 

"It's going to be more difficult for Circle to convince the world to give them assets and let them keep all the yield," Lehtiniitty said. "It makes a ton of sense for consortiums to band together to try to become the leading stablecoin participant in the unit economics. We saw this with the USDG effort. The challenge is the more partners you have the harder it is to align them."