How Mastercard, Stripe, Visa and Coinbase’s New Stablecoin Is Changing the Industry’s Economics
The first stablecoin race was straightforward. Accumulate supply. Customers exchanged dollars for tokens, the issuer invested the corresponding reserves primarily in highly liquid assets, and the interest generated on those reserves became revenue. Scale the circulating supply into the tens of billions of dollars, and stablecoin issuance began to resemble an extraordinarily efficient financial…
In a groundbreaking move, a consortium of 140 members led by Mastercard, Stripe, Visa, Coinbase, and Shopify has launched a new stablecoin called Open USD, or OUSD. The primary distinction of OUSD lies in its innovative approach to stablecoin economics, challenging the traditional model that has dominated the market to date. Instead of retaining the majority of the income generated by reserves, OUSD is structured to return reserve earnings, minus a management fee, to participating businesses.
This model aims to shift the balance of economics from the stablecoin issuer to the businesses and platforms that facilitate its use. The new stablecoin operates on the principle that if financial institutions, banks, and payment companies provide customers and transaction volume, then they should also share in the yield generated by the dollar reserves backing the stablecoin.
By providing a reason for distributors to promote the currency, OUSD alters the incentive structure from one of "please integrate our stablecoin" to "participate in the economics when your customers use it." This shift in dynamics could potentially reshape the stablecoin landscape, potentially paving the way for a more equitable distribution of economic benefits.
Written by urgent.news from PYMNTS's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
