Stablecoins have become the major selling point of crypto over the past year or two, and now a partnership of tech giants, Wall Street financial institutions, and crypto startups are looking to build out the stablecoin to end all other stablecoins.
Known as Open USD, this new stablecoin brings together more than 140 prominent companies in an effort to built an open standard for a dollar-pegged crypto token. Some of the most prominent names who have joined this initiative include Visa, Mastercard, BlackRock, BNY, Google, Samsung, DoorDash, and Coinbase. “What sets Open USD apart is that it’s genuinely open: no single company controls it, and the partners building on it have a seat at the table,” Andy Fang, co-founder of DoorDash, said in a Open USD statement. “That’s the right foundation for moving money for everyone.”
Open USD is expected to be available later this year, and is said to be governed by an independent company, known as Open Standard, which will have a board made up of company partners. U.S. dollar reserves for the stablecoin will be held by Open Standard and provided to partners after a management fee is taken out. That management fee will go towards the funding of Open Standard’s operational costs. Additionally, there are reportedly no fees associated with the mint and redemption processes for the stablecoin.
Zach Abrams, who previously co-founded a stablecoin startup that was acquired by Stripe just last year, will operate as Open Standard CEO.
In terms of the blockchain-rails upon which Open USD will be issued, the large number of crypto-focused partners from Ripple to Bitcoin-based Lightspark indicates the stablecoin will be issued on every and any blockchain that wants it. On X, Coinbase confirmed Open USD would be available on their incubated Base blockchain at launch. Similar statements of future support were made by Plasma, Ripple, Solana, and others.
Let’s Try This Again
One of the most striking attributes of Open Standard is that it looks rather similar to the consortium Meta (then Facebook) tried to put together in 2019 for their own digital currency offering, known as Libra before rebranding to Diem. The project was eventually abandoned, mostly due to both lawmakers and regulators taking a generally-negative stance on the project. Of course, we are now operating in a completely different regulatory environment for crypto under the Trump administration, with the GENIUS Act passing last year to provide some regulatory clarity for stablecoins in the U.S.
Meta is notably absent from the list of companies partnering with Open Standard. Earlier this year, the company was reportedly going to get back into the crypto game with a stablecoin integration, so that might have something to do with it.
The crypto sector has recently been centralizing around stablecoins more generally. Tether’s USDT stablecoin is now competing with Ethereum’s ether cryptocurrency as the second-largest coin when measured by total market capitalization, and there’s increased interest in cutting open, decentralized crypto networks out of the relationship between various centralized crypto institutions and their respective users. Coinbase has been increasingly pushing users to the Base blockchain, where Coinbase collects all of the associated transaction fees as revenue. Additionally, stablecoin issuer Circle recently raised $222 million associated with their own Arc blockchain offering.
Is Open Standard more open than the competition?
For what it’s worth, Open Standard does appear to be more decentralized than the simpler, completely centralized solutions offered by the likes of Circle and Tether.
“Credible neutrality is the whole game,” Simon Taylor, who previously led blockchain research and development at Barclays, said on X. “One company’s coin is a product. A coin a hundred competitors agree to share becomes a standard. The cap tables of SWIFT and the early clearing houses were the incumbents of their day in one room. This rhymes.”
Meanwhile, Bitcoin purists see this as a continuation of the greater trend around the institutional capture of this technology. “That is a description of Lightning,” Bitcoin Lightning Network startup Amboss wrote in an article posted on X regarding the characteriziation of Open USD as “shared infrastructure that anyone could build on.”
“[The Lightning Network] is the neutral, already-global settlement layer for money,” Amboss added, “and it does not care which dollar you are moving.”
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