Jefferies warns against buying the dip in Circle as Open USD raises new competition fears
The investment bank said new competition from the Stripe- and Coinbase-backed stablecoin consortium could pressure USDC’s growth.
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Summary
- Circle shares were higher on Wednesday after Tuesday’s plunge, but Jefferies warned that rising competition from bank- and fintech-issued stablecoins, including the new Open USD consortium, could pressure USDC’s growth and market share.
- The Open USD network, backed by more than 140 firms such as Stripe, Coinbase, Visa, Mastercard and BlackRock, aims to share reserve income with participants, potentially making it an attractive alternative for payment providers.
- Circle CEO Jeremy Allaire and ARK Invest’s Lorenzo Valente questioned whether a large consortium can coordinate effectively and withstand regulatory pressure, arguing that USDC’s existing network effects and regulatory footprint give it an edge over new rivals.
