Circle CEO Responds to Competition Concerns Regarding OUSD: Stablecoins are Winner-Take-All! USDC's Decade-Long Network Effect Creates a Triple Moat

According to Mars Finance, on July 1st, Circle co-founder and CEO Jeremy Allaire responded to investors' questions regarding the competition from the emerging stablecoin OUSD, emphasizing that stablecoins are a business built on long-term platform and network effects, with a significant winner-takes-all characteristic. USDC's network strength stems from three barriers: First, the network effect of developer and application integration: thousands of services have integrated USDC, each integration amplifies network utility, forming a positive flywheel of developer preference and user stickiness; Second, the liquidity network effect: USDC is currently the third most liquid digital asset globally, alongside BTC and USDT, while other USD stablecoins have only one-tenth of its liquidity and are highly concentrated on promotional accounts on a single trading platform. USDC's liquidity is dispersed across dozens of exchanges, and it took nearly a decade to build this global liquidity foundation; Third, deep integration of policy and regulation: USDC is the only large-scale global stablecoin simultaneously covering Europe and Japan, and Circle continuously invests in the global banking system, reserve management, and near-24/7 liquidity infrastructure. Artemis data shows that USDC processed nearly $30 trillion in on-chain transactions in Q1 2026, accounting for 80% of all USD stablecoin transactions. Allaire addressed OUSD's core selling points point by point: First, while free minting and redemption are theoretically attractive, the market reality is that stablecoins with strong redemption capabilities, high liquidity, and zero fees naturally become exit channels for competitors. Circle addresses this issue through contractual mechanisms rather than general fee waivers. Second, while "everyone sharing the profits" sounds appealing, Circle has already distributed most of its revenue to distribution partners, while retaining sufficient revenue to continuously invest in the infrastructure that makes USDC a global utility—"distributing all revenue will only starve the infrastructure." Third, while the consortium governance model is attractive, its history of scaling and product agility is extremely poor. Large corporations often suffer from poor coordination, inconsistent incentives, and self-interest that stifles consortium operational investment. Circle attempted a similar model in the early days of USDC, encountering immense challenges even on a small scale; small, focused strategic partnerships and independently driven business partnerships almost always prevailed. Allaire also explicitly stated that Circle's stablecoin partnership with Coinbase remains strong, with both parties seeing significant opportunities to expand the USDC network. He expressed optimism about the overall growth of the stablecoin ecosystem, welcomed OUSD, and revealed that Circle is continuously expanding its partnerships with dozens of other stablecoin issuers through platforms such as Arc, CCTP, CPN, StableFX, and Agent Stack, even though some of these partners compete with Circle in other areas of their business. Last night, Open Standard announced the launch of OpenUSD, a new stablecoin backed by over 140 companies including Visa, Stripe, Mastercard, BlackRock, and Coinbase. According to BIT (bit.com) market data, Circle's stock price fell over 16% on Tuesday as a result, but has since rebounded briefly to a 1.55% gain in pre-market trading.