Circle (CRCL) shares bounced 5% Wednesday after a 17% plunge, as investors are weighing whether the new Open USD stablecoin consortium backed by Stripe, Mastercard, Coinbase and BlackRock poses a lasting threat to the $USDC issuer.
Global brokerage Jefferies isn’t convinced the selloff has fully priced in the risks, arguing that Circle faces mounting competitive pressure as banks, payment firms and fintechs increasingly launch their own stablecoins.
“Buy the dip? We wouldn’t,” the firm’s analyst team wrote in a note to clients.
“CRCL headwinds are unlikely to ease,” analysts wrote, warning that competition could pressure $USDC‘s supply growth and market share.
The authors argued that Circle, which holds roughly 25% of the $300 billion stablecoin market, is moving into a more competitive phase. While $USDC benefited from an early lead after launching in 2018, Jefferies said new entrants now have something Circle lacked in its early years: large built-in distribution networks.
The launch of Open USD, backed by more than 140 companies including Stripe, Coinbase, Visa, Mastercard and BlackRock, points that shift. The consortium plans to share reserve income with participating companies, potentially making the platform more attractive to payment providers and fintechs.
