Open USD makes its debut or disrupts the stablecoin ecosystem! Morgan Stanley: Visa and Mastercard's "channels" have turned into "masters", Circle and Tether are under pressure.

Macquarie released a report on Tuesday stating that the official launch of Open USD stablecoin represents a structural positive for Visa (V.US) and Mastercard (MA.US). The stablecoin has already signed agreements with over 140 partners, rapidly expanding its ecosystem. Macquarie has given both Visa and Mastercard an "outperform" rating. Analyst Paul Golding noted in his report to clients: "The two card networks are no longer just supporting third-party stablecoins, but are directly involved in the stablecoin ecosystem, which can influence governance direction and potentially share in the economic benefits of the token itself - not just limited to revenue from fiat on-ramps and off-ramps." Several key design principles of Open USD include zero-cost minting and redemption, where enterprises can mint and redeem OUSD for free, with no scale limit. This contrasts sharply with the minting/redemption fees charged by Circle USDC and Tether USDT, and the extraction model they employ. Golding believes this could pressure the business models of Circle's USDC and Tether, while also potentially marginalizing PayPal's PYUSD market position further. Open USD also returns reserve asset earnings to ecosystem participants. Nearly all interest generated by the underlying US Treasury bond reserve is returned to participating enterprises after deducting a small management fee. In the current model, the issuer (such as Circle) retains the vast majority of reserve interest income - according to Circle's filing, this source accounts for 99% of its 2024 revenue. Furthermore, Open USD employs collective governance, governed by partners collectively rather than controlled by a single company. Interim CEO of Open Standard, Zach Abrams, stated: "Existing stablecoins have their advantages, but for widespread use, enterprises need an open, low-cost, high-throughput, widely accessible, and aligned-incentive solution." This model directly replicates certain elements of Facebook's (now Meta) Libra project from 2019 - a project that Visa, Mastercard, and Stripe supported at the time but withdrew from within a few months under regulatory pressure. The difference now is that the US GENIUS Act has established a more mature regulatory framework for stablecoins. The market quickly reacted to this news. During regular trading hours on Tuesday, Circle's stock price plunged by 18%, followed by a further 0.7% drop in after-hours trading; PayPal's stock price dropped by 2.7%, followed by a 0.4% decrease after hours. Golding further pointed out: "As Open USD scales, institutional participants will have financial incentives to steer their business activity towards a shared economic model, which could pose a competitive challenge to the current stablecoin landscape dominated by issuers." He also emphasized that Open USD's success in partner recruitment lays a solid foundation for its prospects and is likely to accelerate the overall adoption process of stablecoins. "The widespread support from banks, card networks, merchants, fintech companies, and crypto enterprises indicates that stablecoins are increasingly seen as the backbone infrastructure for round-the-clock fund flows - for payments, settlements, and treasury management, rather than just auxiliary tools for crypto transactions," Golding wrote. Furthermore, Paul Golding noted that Open USD represents a structural positive for Visa and Mastercard. In the previous model, the two card networks were merely "fiat on-ramps" for stablecoins - earning transaction fees when users exchanged fiat for stablecoins, positioning them on the fringes of the ecosystem. Under the new model, Visa and Mastercard directly participate in the governance and economic distribution of the stablecoin ecosystem - influencing the governance direction of OUSD and sharing reserve earnings, not limited to just fiat on-ramp revenues. Visa's Chief Product and Strategy Officer, Jack Forestell, stated: "As stablecoins become more deeply integrated into the global financial system, governance, interoperability, and trust will be crucial." Additionally, historical competitors such as Visa, Mastercard, and Stripe are collaborating to use Open USD for standardized settlement processes, with this shared infrastructure expected to greatly simplify operations and reduce costs.