The original text is from Circle Founder & CEO Jeremy Allaire
Compiled by | Odaily Planet Daily Qin Xiaofeng (@QinXiaofeng888)
Editor's note: On June 30, the stablecoin project Open Standard, supported by 140 globally renowned enterprises, officially announced its launch and plans to introduce a new US dollar stablecoin, Open USD, later this year, aiming at Circle (USDC). Circle (NYSE: CRCL) saw its stock price plummet by more than 17%, leading to discontent among investors. As the Founder & CEO, Jeremy Allaire responded with a lengthy article to boost confidence.
He stated that the stablecoin market is a "winner-takes-all" scenario, and USDC has maintained a dominant position due to nearly a decade of application integration, global liquidity, and regulatory compliance. The free redemption, profit-sharing, and alliance model advocated by OUSD is unrealistic and may undermine infrastructure investment and efficiency. Affected by this news, Circle (NYSE: CRCL) saw its stock price rebound by 4% on July 1, ultimately closing down 1.09%.
Below is a consolidation of two recent tweets from Jeremy Allaire, translated by Odaily Planet Daily. Enjoy~
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We have received many questions from the investor community seeking to understand our views on OUSD, so I would like to share my perspective directly here.
The stablecoin network is a platform business with network effects that requires long-term accumulation and often trends towards a "winner-takes-all" market structure, similar to other internet platform utility markets. Many factors drive this phenomenon.
First, the stablecoin network plays the role of an internet public protocol and software layer, and its network strength depends on the number and scope of applications and services integrated into the network. Each time a developer or service provider integrates into the network, it brings more network effects, further attracting more developers, increasing practicality and network effects, ultimately driving demand for the digital currency itself, and reinforcing these advantages through liquidity network effects.
We have massively realized this on the current USDC network—tens of thousands of services are integrated into our network, providing immense utility to each application and great convenience to all users, who benefit significantly from the existing coverage and interoperability. This further drives user and developer preference. We have invested nearly a decade in building this ecosystem, and now with mainstream institutions accessing the network and connecting their customers and users, this process is accelerating.
We enhance and expand the network by building a software stack—protocols like CCTP and Gateway that facilitate interoperability, security, and liquidity globally. This expands the targeting coverage for application builders and developers, allowing them to easily access existing liquidity and network effects. We are now seeing this software stack introduced to various chains, permissioned L2s, government-built networks, and many more scenarios.
Second, liquidity network effects, which are foundational. Liquidity begets liquidity. To achieve scale and utility, stablecoins must possess high liquidity—this includes primary markets (e.g., firsthand bank liquidity through global financial centers) and secondary markets, which provide accessible and tradable liquidity for retail and institutional customers in various regions, capable of connecting with various global fiat currency instruments. Those seeking to obtain and transfer value must be able to easily enter and exit the digital currency.
In this regard, we have spent nearly a decade building liquidity, which is now deeply rooted in numerous institutions such as exchanges, DeFi platforms, payment service providers (PSPs), payment companies, regional exchanges, etc. Establishing these liquidity network effects also involves building a global regulatory infrastructure to ensure stablecoins can be used across different regimes worldwide. Today, USDC ranks among the top three digital assets with the highest global liquidity, with a clear gap from the newcomers. BTC, USDT, and USDC all possess extremely high liquidity, while the closest other US dollar stablecoins are about one-tenth the scale of USDC, often with liquidity concentrated on a single exchange's order book; USDC's liquidity is widely distributed across dozens of different platforms. Building this liquidity has been our ongoing task for nearly a decade and continues to this day.
Third, network effects arise from deep integration with policy and regulatory environments. In many cases, this is the result of years of effort to obtain licenses (for example, USDC is currently the only large global stablecoin that can be used throughout Europe or Japan), and an increasing number of stablecoin regulatory frameworks are being established—Circle ensures that USDC is at the forefront of obtaining official recognition, registration, licensing, and acceptance in the world’s most important markets. This also involves establishing a global banking, reserve management, treasury, and liquidity management system capable of operating almost around the clock in global markets and banking systems. This globalization effort is a massive undertaking that we have been committed to for many years.
All these investments by Circle and our ecosystem of thousands of global partners ultimately result in providing the world's most trusted and accessible digital dollar infrastructure—any user, developer, or enterprise can freely and conveniently access this utility, and we do not intend to slow down.
All these factors compound together, ultimately reflected in the data. According to data from third-party analytical agency Artemis, which tracks stablecoin adoption, in Q1 of 2026, the on-chain transaction volume of USDC processed nearly $30 trillion, accounting for 80% of all dollar stablecoin transactions across blockchains; USDT processed the remaining 20% of transactions; all other dollar stablecoins accounted for 0% of transaction volume (i.e., below 0.5%). Although other stablecoins may have some circulation, much of it stems from promotional and incentive activities, with actual usage being extremely limited—because the liquidity and network utility of these coins are very restricted.
The above content represents not only the advantages of the Circle network but also unavoidable issues for all newcomers entering the field. Of course, I have also heard many voices that believe OUSD does better than USDC in many aspects.
(1) Free minting and redemption. There is a viewpoint arguing that existing stablecoins charge redemption fees, and payment companies should not bear these costs (even though the entire payment industry is based on charging small bps fees at various entry and exit points of their networks). There is a structural reality in the market—some stablecoins charge extremely high redemption fees and have limited redemption facilities—leading to the effect that stablecoins with good redemption facilities, adequate liquidity, and no fees become exit routes for competing stablecoins. Saying "offer unlimited free redemptions" seems easy, but market realities may force change in behavior. Circle tackles this issue through contractual mechanisms rather than blanket fee waivers, and it has already been addressed.
(2) Win-win for all, shared profits. This sounds appealing, but market realities tell a different story. Now, Circle shares most of its revenue with distribution partners and continues to actively push for cooperation expansion with industry-leading companies. However, at the same time, we also retain considerable revenue to invest in large-scale market infrastructure, which is precisely what makes the network a powerful and valuable utility that global builders can rely on. Giving up all revenue means starving the infrastructure, leading to systemic underinvestment, which will ultimately limit the platform’s breadth.(Odaily note: In Q1 2026, Circle's revenue was $694 million, with distribution accounting for $407 million, or 59%)
Moreover, Circle believes that the future stablecoin market could be several orders of magnitude larger than today. We are actively bringing more partners into the USDC ecosystem through a diverse and ever-growing partnership model, covering exchanges, custodians, payment companies, asset issuers, and more. We are happy to continue building with a “Big tent mentality,” allowing the whole ecosystem to appreciate together. (Odaily note: "Big tent mentality" is a political and organizational strategy that refers to a political party, business, or organization encompassing diverse and even opposing views and factions to attract the broadest group, building consensus through seeking common ground while reserving differences to gain more support or market share.)
(3) An alliance where everyone has a voice. Perhaps my view is somewhat pessimistic, but the record of alliance-type products in achieving scale, product-market fit, and even basic product agility is absolutely disappointing. Although there are indeed examples of financial alliances operating utilities, they tend to act slowly. Large corporate groups struggle with coordination issues, inconsistent incentives, and slow down progress, rarely creating space for genuine lasting innovation and competitiveness. Moreover, they often lack resources on the operational level due to self-interest.
We actually tried this approach early in USDC’s journey, faced countless challenges and complexities even with few participants. Smaller, tighter strategic collaborations and business partnerships, led by product and platform builders capable of independent advancement, have almost always outperformed large alliances. However, often when such alliances are formed, everyone feels they should have their branding included, pose for a statement, and loudly proclaim openness. Yet, these companies usually end up turning to their operational departments to make the best decisions for customers—often meaning collaboration with market leaders to establish lasting win-win partnerships.
There have also been many comments about Circle and Coinbase's partnership and what it all means. Our stablecoin partnership with Coinbase remains as strong as ever, and I believe we both see the tremendous opportunities to expand the USDC network.
Finally, I would like to add that Circle is always committed to supporting a wide range of products and infrastructure, even if we may compete with partner products in certain business areas. We maintain close cooperation with many founding members of OUSD, and we expect these members will continue to be important partners and clients of USDC. Meanwhile, as Circle diversifies and develops our product and platform stack, expanding into many areas such as Arc, CCTP, CPN, StableFX, Agent Stack, etc., we are also continuously expanding our cooperation and collaboration with dozens of other stablecoin issuers, helping them issue based on Arc, utilize our interoperability infrastructure, gain support in our wallets, and become settlement and forex options on CPN and StableFX.
We firmly believe in the growth of the stablecoin ecosystem and welcome OUSD as a new member of the community!
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