Coinbase Open USD Stablecoin Stake|$1 Billion Rival to Its Own USDC Rewards?

A coin built to be owned

Coinbase is a founding owner of Open USD, a new stablecoin backed by over $1 billion in liquidity commitments. Yet Coinbase's cost forecast carves out one exception, USDC rewards, and analysts say the newcomer would hurt USDC's issuer most. Open USD, or OUSD, went live on September 30 on four blockchains, including Coinbase's own network, Base.

Its five founding partners are Coinbase, Mastercard, Shopify, Stripe and Visa. Each holds an equal starting equity stake. A stablecoin is a crypto token pegged to a real currency, here the U.S. dollar. USDC, issued by Circle, is the second largest. A tracker of DefiLlama data puts its share at about 23 percent of a roughly $308 billion market.

In September, Coinbase finance chief Alesia Haas said 2026 expenses would look very much like 2025, "absent what happens with USDC rewards." So Coinbase now co-owns a challenger to the one coin its own cost promise could not pin down. Most stablecoin issuers keep the bulk of the income from their reserves, or share it with a few chosen distributors. Open Standard, the company behind OUSD, plans to work differently.

It plans to hand most of its equity to partners based on how much they grow OUSD. The founders' stakes start out equal. How much each one invested was not disclosed. The founding circle is expected to widen to around 10 to 12 companies. The broader partner network already tops 200. So Coinbase's slice is not a fixed number. It moves with how much OUSD Coinbase helps spread.

Much of the machinery sits inside the founding circle. OUSD is issued by Bridge, which Stripe bought for $1.1 billion in 2024. It trades on Coinbase at launch, and Coinbase is one of the official routes for businesses to build on it. Coinbase's public face has leaned on USDC. Asked for a favorite cryptocurrency, CEO Brian Armstrong called Bitcoin the original, then highlighted stablecoins such as USDC.

One market report says USDC dominates AI agent payments through Coinbase's x402 standard. By that account, Coinbase's Base network handles over 90 percent of 160 million transactions processed there. Yet Visa's new stablecoin platform for banks starts with Open USD, according to a Motley Fool report. USDC support is set to follow later this year.

KeyBanc analysts wrote, "We believe Circle would be most negatively impacted by OUSD success." Mizuho had already downgraded Circle stock in July, citing competition from this new stablecoin model.

Who else wants the digital dollar

That two-sided position reaches into Coinbase's own outlook. Wells Fargo analyst Daniel Welden began coverage on October 1 with an Equal Weight rating and a $200 target. Welden said mixed USDC trends temper the firm's constructive view of a crypto recovery. Welden also warned that stronger activity may not translate fully into revenue.

Analysts have cut their full-year 2026 revenue estimate for Coinbase from about $8.5 billion. It now sits around $5.3 billion. That is more than a third lower. With revenue estimates shrinking, the cost pledge carries more weight. And its one named exception rests on USDC, the coin analysts expect OUSD to pressure. Then the banks moved.

According to The Wall Street Journal, JPMorgan Chase has explored a potential stablecoin, though talks are preliminary and no product is in development. A consortium of more than a dozen banks, including Bank of America, Wells Fargo and Santander, is advancing plans for a commercial-focused stablecoin. A separate group, the BankChain Alliance, plans a bank-owned blockchain network in 2027.

Its members number over 3,000 institutions with more than $21.8 trillion in assets. The group has discussed a stablecoin backed by dollars, euros and other currencies. The Journal reported that bank executives worry these tokens could encroach on traditional banking. Coinbase and Circle shares edged lower on a Wednesday after the reports, amid fears of new competition for crypto-native issuers.

Some banks are circling OUSD itself. American Banker reports it has drawn attention from BNY, U.S. Bank and Huntington. The publication says OUSD's shared economics give banks a financial incentive to use it.

The bank that chose the rails

If banks are the new rivals, Citigroup's move points the other way. The banking giant expanded its partnership with Coinbase for stablecoin payments. In a joint statement, the two said Citi clients could move between regular money and stablecoins without building banking and crypto systems themselves.

Coinbase Virtual Accounts will run on Citi's banking platform, with Citi converting incoming fiat into stablecoins automatically. Citi's merchant platform, Spring by Citi, will use Coinbase's infrastructure to accept stablecoin payments. The deal extends a digital asset payments collaboration the two first announced in October 2025.

Open Standard's chief executive, Zach Abrams, described the aim this way: "We want to be the most useful stablecoin, the same way the U.S. dollar is useful." Abrams added that other stablecoins behave more like funds than usable currency. Citi's head of payments services, Debopama Sen, said: "Our goal is to build the next generation of payments infrastructure."

Sen said it should operate "across both traditional and digital payments instruments and networks." One side is building a coin. The other is building rails. And according to the report on the Citi deal, neither Citi nor the report said which stablecoins or blockchains will be supported. Coinbase sits inside both statements. It co-owns the coin, and it supplies the rails.

A Simply Wall St analysis argues that owning Coinbase means believing its infrastructure can earn durable revenue beyond trading cycles. It says the Citi deal supports that case.

The rule that is still missing

Armstrong had expected the CLARITY Act, a bill to set U.S. crypto market rules including payment stablecoins, to reach a Senate vote on September 15. It came, and it failed. The procedural vote ended 49 to 50. It needed 60 to advance. All Democrats who voted opposed it, along with several Republicans. Democrats remained concerned the ethics rules did not cover President Trump's crypto interests.

Republican negotiators said the final text already held 126 changes Democrats had requested. There was a second fault line. According to an industry report, the bill was deadlocked for much of 2026 partly because the banking lobby objected to crypto firms letting clients earn stablecoin yield. That is the same ground as the exception in Coinbase's budget. The cost pledge holds absent what happens with USDC rewards.

And the law that would frame stablecoin rules has stalled. Time is short. House leaders cancelled their last September voting weeks, leaving Washington until after the midterm elections. Bernstein analyst Gautam Chhugani said investors should not count on a re-vote. Chhugani expects rule-making from the SEC and CFTC to carry the sector's catalysts instead. One door remains open.

Senator Thom Tillis switched to a no vote for procedural reasons that preserved the option of reconsideration. Coinbase's stake in a USDC rival reads less as a break with USDC than as a bet spread across coins, banks and rails. It was placed while the rules on stablecoin rewards remain unwritten.

The signal to watch is whether the Senate uses that reconsideration option, and what any revived text says about stablecoin yield. If a revived bill leaves room for rewards, exchanges like Coinbase keep that tool as banks weigh coins of their own. If the vote never returns, or yield limits tighten, the banks that objected gain ground, and Coinbase leans harder on its rails and its OUSD stake.

Informational only, not investment advice. Figures and quotes come from the linked reports.