Macquarie issued a report on Tuesday pointing out that the official debut of the Open USD stablecoin represents a structural positive for Visa (V) and Mastercard (MA). The stablecoin has already signed more than 140 partners, with its ecosystem expanding rapidly. Macquarie has given both Visa and Mastercard an “Outperform” rating.
Analyst Paul Golding stated in a report to clients that the two major card networks are no longer merely supporting third-party stablecoins but are directly participating in the stablecoin ecosystem. In this process, they can both influence governance direction and potentially share in the economic benefits of the token itself, rather than being limited to revenue from fiat on-ramp and off-ramp channels.
Under the previous model, Visa and Mastercard served merely as fiat on-ramp and off-ramp channels for stablecoins. When users exchanged fiat currency for stablecoins, the card networks earned transaction fees, placing them at the periphery of the ecosystem. Under the new model, the two major card networks directly participate in the governance and economic distribution of the stablecoin ecosystem. They can not only influence the governance direction of OUSD but also share in reserve yields, rather than being limited to fiat on-ramp and off-ramp revenue. Visa Chief Product and Strategy Officer Jack Forestell stated that as stablecoins become more deeply integrated into the global financial system, governance, interoperability, and trust will be crucial. In addition, historical competitors such as Visa, Mastercard, and Stripe are collaborating to standardize settlement processes using Open USD, and this shared infrastructure is expected to significantly streamline operations and reduce costs.
Open USD’s core design principles include support for zero-cost minting and redemption. Enterprises can mint and redeem OUSD for free with no upper limit on scale. This directly targets the minting and redemption fees charged by Circle USDC and Tether USDT, standing in stark contrast to the issuer-capturing model. Golding believes this could put pressure on the business models of Circle’s USDC and Tether, while PayPal’s PYUSD market position may also become further marginalized.
Open USD also returns reserve asset yields to ecosystem participants. Nearly all interest generated by the underlying U.S. Treasury reserves, after deducting a small management fee, is returned to participating enterprises. Under the existing model, issuers such as Circle retain the vast majority of reserve interest income. According to Circle’s filings, this source accounted for 99% of its 2024 revenue. In addition, Open USD adopts collective governance, governed jointly by partners rather than controlled by a single company. Open Standard Interim CEO Zach Abrams stated that existing stablecoins have their advantages, but for large-scale use, enterprises need solutions that are open, low-cost, high-throughput, broadly accessible, and aligned with their interests.
The market has already responded swiftly. During regular trading on Tuesday, Circle’s stock plunged 18%, and continued to fall 0.7% after hours; PayPal’s stock dropped 2.7%, and fell another 0.4% after hours.
William Blair analyst Andrew W. Jeffrey believes the market’s concerns over competitive risks are overblown. In his report, he wrote that competition is inevitable in a stablecoin market exceeding $20 trillion in scale, and this actually validates the viability of the stablecoin commercialization model and will benefit Circle and its USDC. Jeffrey reaffirmed his “Outperform” rating on Circle (CRCL), citing its first-mover advantage, stronger liquidity, and the stablecoin circulation infrastructure CPN. In addition, USDC’s market capitalization of approximately $73 billion is nearly 15 times that of its closest competitor that complies with the GENIUS Act requirements. He believes new entrants will find it difficult to replicate Circle’s business model, and that the claimed advantages such as reserve yield sharing are not fundamentally different from the existing model in practice.
