Open USD Launches with Over $1 Billion in Liquidity Pledges

Open USD has been introduced across four blockchains, securing over $1 billion in liquidity commitments from five founding partners. This stablecoin model integrates company rewards and ownership with the supply and usage of the tokens.

A report indicates that Open Standard’s dollar stablecoin was launched on Wednesday. CEO Zach Abrams mentioned that the five founding partners will assist in establishing liquidity in the upcoming months.

Abrams outlined that the companies might hold OUSD on their balance sheets, retain tokens on blockchains, or engage in market-making, depending on what aligns best with their operations.

The commitments ensure future liquidity support, with the five companies having also invested in Open Standard and receiving equal initial equity stakes, as stated by the CEO.

Open USD links partner rewards to supply and transactions

In detailing the applications for the payment system, Abrams identified banking, cross-border transfers, card settlements, institutional trading, and lending as key markets Open Standard aims to penetrate.

“We strive to be the most functional stablecoin, akin to the utility of the U.S. dollar,” he expressed.

Instead of providing founders with a distinct revenue share, Open Standard intends to incentivize them based on the OUSD supply they create, under the same conditions as other partners, as explained by Abrams.

The CEO also shared plans to distribute a significant portion of the company’s equity over the next four to five years, with ownership being allocated according to contributions towards the growth of the token.

Partners that meet a minimum threshold could earn equity based on a combination of supply and transaction activity, according to Abrams. This framework credits companies for both moving OUSD and facilitating token circulation.

“A large majority of our cap table will be allocated back to both founders and non-founders based on their efforts to grow the network,” he stated.

On its official website, Open Standard claims it will distribute nearly all reserve revenue to companies that contribute to adoption. Additionally, fee-free minting and redemption are highlighted as features of OUSD.

In a separate discussion, Tempo’s Chief Business Officer, Dan Romero, pointed out that eliminating minting and burning fees could lower costs for businesses transferring significant amounts between conventional dollars and stablecoins.

Five founders hold equity as the network passes 200 companies

Open Standard initially launched its project with over 140 partners in June. However, Abrams pointed out that just Coinbase, Mastercard, Shopify, Stripe, and Visa currently hold stakes in the company.

The CEO dismissed characterizations of Open Standard being a consortium governed by numerous participants, asserting that management is responsible for operational decisions, while ownership and governance roles remain with a smaller founding group.

As previously reported by crypto.news on July 1, the initial announcement regarding Open USD hinted at a token launch later in the year, with partner access to reserves after covering operating expenses.

Now, Abrams anticipates the founding group will grow to approximately 10 to 12 companies, governed by a board of directors formed from the founders. Furthermore, the network looking to integrate OUSD has expanded to more than 200 businesses.

Among the latest additions are Japan’s SBI Holdings, Swiss bank UBS, and fintech firm Jeeves. BlackRock, BNY, and Standard Chartered were mentioned in the network outlined in June.

Discussions about participation have continued beyond the founding group. On August 28, Dunamu, the firm behind the South Korean exchange Upbit, announced a partnership with Visa to facilitate stablecoin payments, international remittances, and AI-driven financial services.

Both companies expressed an interest in evaluating OUSD business models as part of this collaboration, although Dunamu initially described its involvement with Open Standard as a proposal pending review rather than a finalized agreement to issue the token.

Circle investors have faced questions over distribution costs

The launch report indicated that OUSD enters a stablecoin market valued at more than $300 billion, with Tether’s USDT holding about $143 billion and Circle’s USDC close to $74 billion.

It noted that reserve income is a pivotal element in the competition among issuers. Tether retains a significant portion of the interest accrued on its supporting assets, while Circle distributes part of USDC’s reserve revenue to its distributors, including Coinbase.

For investors in U.S.-listed Circle, earlier analyses connected Open USD directly to the potential reserve income Circle could retain.

On July 15, Mizuho reduced Circle’s price target from $85 to $50 and downgraded its stock from Neutral to Underperform, citing competition posed by Open USD. Analysts, led by Dan Dolev, cautioned that this new model might alter the economics of stablecoin distribution.

Further in the assessment, Mizuho adjusted its projection for Circle’s distribution and transaction expense ratio for 2027 from 64% to 73%. It also lowered its adjusted EBITDA prediction from $1.09 billion to $699 million.

The launch report emphasized that Coinbase, Visa, and Mastercard remain crucial partners for USDC, even as they support OUSD. Analysts highlighted earlier speculations about whether backing Open Standard might compel these companies to reduce their support for Circle’s token.

Tempo targets OUSD liquidity while other currencies draw interest

With OUSD now available on Ethereum, Solana, Coinbase’s Base, and Tempo, Romero stated that Tempo aims to capture the largest possible pool of liquidity for the token.

He projected approximately $1 billion in OUSD on Tempo within the upcoming months, more than $10 billion by 2027, and potentially exceeding $100 billion in subsequent years. These figures represent Romero’s expectations rather than confirmed balances at launch.

For Open Standard, Abrams identified card settlement, foreign exchange, and cross-border payments as potential opportunities beyond just competing for current USDT and USDC users. He mentioned that stablecoins can facilitate faster and more frequent money transfers compared to traditional banking systems.

The CEO further noted that network members are already expressing interest in stablecoins denominated in different currencies.

Before founding Open Standard, Abrams co-founded and led the stablecoin infrastructure company Bridge, which was acquired by Stripe for $1.1 billion. Reports indicate that Bridge recently issued a euro-backed token for Revolut.

According to Abrams, Open Standard’s decisions on additional currencies will depend on the demand from companies within its network.