A consortium of major financial and crypto firms, including Visa, Mastercard, and Coinbase, has thrown its weight behind a new stablecoin network called Open Standard. The group announced that its dollar-pegged token, Open USD, will launch later this year, with a twist: it will be free to mint and redeem, and the earnings from the reserves backing the token will be shared among partners.
What is Open Standard and Open USD?
Stablecoins are a type of cryptocurrency designed to maintain a stable value, typically by being backed one-to-one by traditional assets like U.S. dollars or short-term government debt. They are widely used in crypto trading and decentralized finance, but have yet to see broad adoption for everyday payments. Open Standard aims to change that by removing a key friction point: the cost and complexity of creating and cashing out stablecoins.
Unlike many existing stablecoins, which charge fees for minting (creating new tokens) or redeeming (converting them back to fiat currency), Open USD will be free to mint and redeem with no volume limits. The consortium says this could make it more attractive for businesses and financial institutions to use the token for payments, remittances, and other transactions.
The bigger innovation, however, is how the reserves are managed. Typically, the issuer of a stablecoin keeps the interest earned on the underlying assets. Open Standard plans to share those earnings across its partner network, potentially creating a new revenue stream for participants. The exact split has not been disclosed, but the model could incentivize wider adoption.
Why Visa, Mastercard, and Coinbase are involved
The involvement of Visa and Mastercard signals that traditional payments giants see stablecoins as a potential evolution of the payments infrastructure. Both companies have been experimenting with blockchain and crypto for years, but have been cautious about fully embracing decentralized tokens. By backing Open Standard, they are betting that a regulated, transparent stablecoin network could eventually handle a meaningful share of digital transactions.
Coinbase, one of the largest crypto exchanges, brings its deep experience in digital asset custody and trading. The exchange already offers its own stablecoin, USDC, through a joint venture with Circle, but Open USD appears to be a separate initiative. It remains to be seen how the two projects will coexist, but Coinbase's participation suggests it sees value in a more open, partner-driven stablecoin model.
The consortium also includes other financial and technology firms, though the full list of partners has not been released. The group says it will operate under a transparent governance structure, with regular audits of the reserves backing Open USD.
What it means for investors
For everyday investors, the launch of Open USD is a sign that stablecoins are moving closer to mainstream financial infrastructure. If the network gains traction, it could lower the cost of moving money across borders and make crypto payments more practical for everyday use. That could benefit companies that rely on payment processing, such as Visa and Mastercard, as well as crypto exchanges like Coinbase.
However, stablecoins remain a nascent and evolving asset class. Regulators in the UK, EU, and elsewhere are still crafting rules for how they should be backed and supervised. The UK recently eased capital rules for stablecoin issuers, and South Korea is exploring bank-led stablecoin issuance, but the regulatory landscape is far from settled. Any changes could affect how Open USD operates and how attractive it is to partners.
Investors should also be aware that stablecoins are not risk-free. The reserves backing them must be managed carefully to avoid a run on the token, as seen with TerraUSD in 2022. Open Standard says it will hold reserves in cash and short-term government bonds, but the details of the custody and audit arrangements have not been fully disclosed.
For now, the announcement is a vote of confidence from some of the biggest names in payments and crypto. Whether Open USD can deliver on its promise of free, frictionless stablecoin transactions will depend on execution, regulatory clarity, and adoption by merchants and consumers. Investors should watch for further details on the reserve structure and partner economics as the launch date approaches.
