Stablecoin Issuers and Exchanges Turn From Partners to Rivals

More than 140 companies joined a consortium called Open Standard on Tuesday to launch a new dollar-backed stablecoin, Open USD (OUSD). The roster includes Coinbase, which co-founded rival USDC with Circle in 2018. Circle is not a member.

Coinbase shares rose about 10% on the news. Circle's valuation in secondary trading fell 16%, according to people familiar with the matter.

Open USD: A Signal of Competitive Tension

For years, stablecoin issuers and exchanges shared a common interest. Exchanges provided liquidity and distribution. Stablecoins supplied the digital dollars that let crypto market activity run 24/7 without bank rails. USDC was the signature example. Coinbase shared reserve income from the token, and USDC became a major contributor to the exchange's profitability.

That partnership is now fraying. Stablecoin issuers are expanding into payments, treasury management, and institutional finance – markets that once belonged to exchanges. Circle talks less about trading volume and more about cross-border settlement. Tether has moved into sovereign adoption and infrastructure investments.

Exchanges see the same opportunity. Coinbase is building Base, wallets, and merchant payments. Kraken offers custody and tokenized products. Binance runs merchant services and broader financial offerings. Analysts describe these moves as vertical integration into the settlement layer, not just diversification.

For stablecoin issuers, the threat is that exchanges launch their own tokens or join consortia that bypass existing issuers. OUSD is one example. For exchanges, the risk is that stablecoin issuers capture recurring revenue from payments and settlement, leaving exchanges dependent on cyclical trade fees.

A historical pattern applies. Whoever controls the deposit – the digital dollar – earns steadier economics than whoever facilitates the transaction. Coinbase’s own filings show USDC reserve income as a meaningful profit contributor. If that share shrinks as the exchange pushes its own consortium stablecoin, the trade-off becomes visible.

Coinbase's next quarterly report will show whether it can replace that revenue stream with infrastructure income from Base, wallets, and custody. The July 2025 earnings call is the first concrete date to watch. The composition of reserve income relative to subscription and services revenue will tell which side is winning the settlement battle.