Jefferies Warns Circle Faces Real Threat From Open USD
The Stripe- and Coinbase-backed stablecoin consortium could erode USDC's growth, says Jefferies.
Jefferies issued a sell-side warning against buying Circle stock on the dip as of July 2026, citing the Stripe- and Coinbase-backed Open USD consortium as a material threat to USDC's market position.
Why It Matters
For iGaming operators and crypto payment processors that rely on USDC as a settlement rail, a credible challenger stablecoin backed by Stripe and Coinbase changes the competitive calculus. Jefferies (per CoinDesk Markets) argues that Open USD could pressure USDC's growth trajectory, which directly affects Circle's revenue — the company earns yield on the reserves backing every USDC in circulation. If market share migrates to Open USD, operators integrating stablecoin payments face a near-term infrastructure decision: stay with the incumbent or hedge across multiple stablecoin rails. That fragmentation adds compliance and liquidity-management overhead for any platform processing crypto deposits and withdrawals. As always, stablecoin exposure carries both counterparty and regulatory risk.
Context
Circle went public in 2026, giving traditional investors their first clean equity play on stablecoin infrastructure. USDC is currently the second-largest stablecoin by market cap, trailing only Tether's USDT. Open USD represents a consortium model — pairing Stripe's payments distribution with Coinbase's crypto-native user base — which, if it scales, replicates Circle's core value proposition with more embedded distribution.
What's Next
Watch Circle's next quarterly disclosure for USDC circulation figures and reserve yield data as the clearest signal of whether Open USD is gaining real traction. Any formal regulatory approval or major exchange listing for Open USD would serve as the next concrete catalyst.
Gambling and crypto asset investment both involve significant financial risk. Nothing here constitutes financial advice.
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