Open USD Tests Stablecoin Incentive War with Visa, Mastercard

Open Standard launched Open USD, a stablecoin that sends reserve earnings to partner businesses instead of the issuer. Visa and Mastercard are among the 140-plus businesses already signed on. Coinbase is also a partner.

Businesses mint and redeem Open USD for free, at unlimited volume. Reserve income passes through to partners net of a management fee. The structure moves the stablecoin competition from trust and compliance into a fight over incentives. The question is who gets paid to hold, route, and lend the next digital dollar.

DeFi commentator Ignas argued that crypto-native users built USDC's liquidity and volume, while the economic upside flowed to Circle, Coinbase, and their distribution partners. Open USD tests whether that behavior finds a new home.

The GENIUS Act bars stablecoin issuers from paying interest directly to holders. Affiliates and third parties may offer interest. Coinbase already pays rewards on USDC balances. PayPal pays them on PYUSD. Open USD's partner list includes wallets and exchanges, plus DeFi protocols such as Aave, Morpho, MetaMask, and Trust Wallet. All sit inside that same gray zone.

DeFiLlama puts total stablecoin supply at nearly $312 billion, with USDT at about $184.6 billion and USDC at around $73.9 billion. Citi raised its 2030 stablecoin forecast to $1.9 trillion in its base case and $4 trillion in its bull case, citing faster growth and a wave of new issuer announcements.

At a 3.7% yield, roughly where short-term Treasury bills trade now, every $1 billion of Open USD in circulation would generate about $37 million a year in gross reserve income before fees and costs. Circle's first-quarter 2026 results show the pool is already in motion: $653 million in reserve income against $407 million in distribution and transaction costs. Circle says costs rose due to higher payments to partners. Circle's 2025 annual filing also discloses that it shares reserve-related income directly with Coinbase to keep USDC liquid and widely used. Open USD is applying the same playbook to a far larger partner list from the start.

Markets reacted immediately. Circle shares fell as much as 17% intraday on the day of the announcement, touching a low near $63. Investors priced in a direct hit to the reserve income that funds Circle's business.

The favorable path has Plasma, Tempo, wallets, and DeFi protocols turning their share of reserve income into liquidity campaigns almost immediately. Open USD pools appear on Plasma-native exchanges. Lending markets accept the token as collateral. Wallets layer cashback on top of chain-level rewards. Early liquidity concentrates, so even a modest pass-through rate compounds into a meaningful subsidy. The yield pulls deposits away from USDC and USDT pools while Open USD stays marketed strictly as a payments token.

The less favorable path leaves reserve income wherever it lands. Payment firms and exchanges treat their share as margin. DeFi incentives remain occasional and temporary. Open USD circulates mostly within enterprise settlement rails. Users stick with USDC or USDT, which already carry the liquidity depth and collateral support a stablecoin needs to be useful at scale.

Open USD is planned to launch with native support on Plasma and Tempo later this year. The first liquidity campaigns will show whether partners pass the yield through.