Coinbase, a co-creator of the USDC stablecoin, is backing Open USD (OUSD), a new stablecoin that could directly compete with its own product. The move highlights a growing tension in the stablecoin market: distributors, who manage user inflows, want a bigger cut of the yield generated from reserve assets.
Open USD is designed to distribute yield more directly to those who bring in customer cash, according to the report. This structure could shift economics away from issuers like Circle toward intermediaries like Coinbase, which processes billions in stablecoin transactions.
The regulatory landscape for stablecoins in the U.S. remains unclear, with the SEC and CFTC still debating jurisdiction over tokenized dollar products. Coinbase's dual role as both issuer supporter and distributor adds complexity to its positioning amid ongoing oversight.
In market cap terms, USDC is the second-largest stablecoin at roughly $27 billion, trailing Tether's $90 billion dominance. OUSD would enter a crowded field, where even minor distribution shifts could impact revenue flows currently captured by existing players like Circle, which manages USDC reserves.
The crypto community has reacted with skepticism, viewing Coinbase's support of a rival product as a hedge against over-reliance on a single stablecoin ecosystem. Competing protocols like MakerDAO's DAI maintain decentralized alternatives, but OUSD's centralized distributor-focused model could appeal to large exchanges seeking better terms.