Remember when everyone and their brother started launching (or announcing the launch of) stablecoins following the passing of The GENIUS Act, which established the first U.S. federal framework for regulating dollar-backed cryptocurrencies?
The space immediately became saturated with announcements from banks and fintechs like SoFi, Fiserv, Klarna, and Western Union, while retailers like Walmart and Amazon were said to be exploring their own stablecoin projects — setting the stage for a volume of proprietary coins that could quickly become a hassle for customers to manage. Instead of one single digital wallet that holds, uh, money that can be used anywhere, customers can soon hold a shitcoin (I mean, stablecoin) for every company they shop or bank with!
The disparate stablecoin ecosystem I describe above is what Open Standard aims to reconcile with the launch of Open USD, a new stablecoin backed by more than 140 major tech players including Visa, Stripe, Mastercard, Shopify, Google, DoorDash, BlackRock, and other household names.
The company shared three key design principles of Open USD in its announcement:
- Build for scale. Businesses can mint and redeem Open USD at no cost and with no artificial limits on volume.
- Earn by default. Partners receive all of the earnings from Open USD’s reserves, less a small management fee to cover Open USD's operational costs.
- Govern collaboratively. Open USD will be operated by Open Standard, an independent company with a board made up of Open USD’s partners, ensuring decisions are made for the collective interest, not a single entity.
CEO Zach Abrams wrote that while existing stablecoins “have great strengths,” businesses need a coin that's “open, low-cost, high-throughput, broadly accessible, and aligned to their interests” — not one that is designed for one company's needs. Open Standard says that the coin will go live later this year, but no specific date has been given.
If the above sounds like an advertisement or endorsement for Open USD — believe me, it's not. Although I respect their mission of creating a universal partner-driven stablecoin that serves the needs of various businesses and use-cases, I'm still not jumping on the stablecoin bandwagon.
The U.S. needs to update its existing fiat infrastructure to best serve the needs of businesses and consumers for the next 100 years — not allow major institutions to build a private layer on top of it. Privately issued stablecoins, no matter how many big name partners are on board, are not the solution to modernizing our digital financial infrastructure. Though I will admit that Open USD is the best stablecoin solution project I've seen so far, as it aims to simplify the ecosystem for consumers.
