Visa, Mastercard, and Coinbase have thrown their weight behind a new stablecoin called Open USD — and it could fundamentally change who gets paid when you hold, spend, or lend digital dollars. The project, launched by Open Standard, already counts over 140 businesses as partners and promises to share reserve earnings with the companies that help it circulate. For anyone using DeFi apps to earn yield, that shift could rewrite the rules of the game.
By Priya Sharma | July 19, 2026
The Hook: A New Stablecoin With a Very Different Business Model
For years, the stablecoin market has been dominated by two giants: Tether (USDT) and Circle (USDC). Tether holds roughly 184 billion USD in circulation, while USDC sits around 73 billion. These two tokens became the default dollars of crypto trading — the plumbing beneath exchanges, lending platforms, and payment apps. But the companies issuing them kept most of the financial upside, earning interest on the Treasury bills and reserves backing their tokens.
Open Standard wants to flip that model. Its new token, Open USD, lets businesses mint and redeem the stablecoin for free at unlimited volume. The twist? Reserve earnings flow to partner businesses, minus a management fee. That means companies like Visa, Mastercard, and Coinbase — which help users spend, hold, and move Open USD — can collect a share of the interest generated by the reserves backing the token.
It is a subtle shift with massive implications. Instead of one company capturing all the float, the revenue gets distributed across the network of partners that actually make the stablecoin useful.
What Makes Open USD Different From USDC and USDT
The stablecoin wars have moved through four distinct phases, according to DeFi commentator Ignas. First came the trust phase, where Tether and Circle fought over whether their tokens were fully backed. Then came the compliance phase, where regulations like the GENIUS Act in the US and MiCA in Europe rewarded regulated issuers. The third phase was distribution, with payment networks and exchanges competing for placement in apps and wallets.
Open USD pushes the contest into a fourth phase: an incentive war. The question is no longer just whether a stablecoin is safe or regulated — it is who gets paid to hold, route, and lend it.
- Free minting and redemption — Businesses can create or destroy Open USD without fees, removing a cost barrier that exists with other stablecoins.
- Shared reserve income — Partners earn a cut of the interest generated by the reserves, giving them a financial reason to promote the token.
- 140-plus launch partners — Including Visa, Mastercard, and Coinbase, giving Open USD immediate distribution muscle.
- Planned Plasma and Tempo integration — Open USD is set to launch natively on these networks later this year.
The Core Conflict: Who Profits From Your Digital Dollar?
Ignas, a well-known DeFi commentator, framed the tension sharply. Crypto-native users built USDC’s liquidity — they provided the trading volume, the liquidity pools, the lending collateral, and the habit formation that made USDC useful. But the economic upside flowed to Circle, Coinbase, and their distribution partners. Users got a stable token; the companies got the Treasury yield.
Open USD addresses that imbalance by sharing the pie. A partner that collects reserve-share income can pass it along to users in several ways: DEX liquidity mining rewards for supplying Open USD to trading pools, higher APY on Open USD collateral in lending protocols, wallet cashback for spending or holding the token, or bridge fee rebates for moving it across networks.
Each route puts the incentive in a partner’s hands rather than the issuer paying interest directly — a structure designed to stay within the lines regulators have drawn.
What This Means for DeFi Yields and Regular Investors
If you use DeFi apps to earn yield on your crypto, Open USD could matter more than you think. Here is why: the current yield landscape is dominated by a few stablecoins. Aave, Compound, and other lending platforms offer APY on USDC and USDT deposits, but those rates are driven by borrower demand, not by the reserve income those stablecoins generate.
Open USD changes the math. If partners route their reserve-share income into liquidity mining on decentralized exchanges, supplying Open USD to a trading pool could earn more than supplying USDC. If lending protocols offer boosted rates on Open USD collateral, borrowing against it becomes cheaper. And if wallet apps offer cashback on Open USD spending, holding it becomes more rewarding than holding a traditional stablecoin.
For everyday investors, the practical effect is simple: more competition for your stablecoin holdings means better returns. Whether you lend on Aave, provide liquidity on Uniswap, or just hold dollars in a crypto wallet, the floor on what you earn could rise.
Ethereum is currently trading near 1,867 USD, with Bitcoin around 64,526 USD. SOL sits at roughly 76 USD. None of those prices tell you what stablecoin yields look like — but the stablecoin backing your DeFi position determines what you earn.
The GENIUS Act Loophole That Makes This Possible
The GENIUS Act, signed into law in July 2025, created the first federal framework for stablecoins in the United States. One of its key rules: stablecoin issuers cannot pay interest directly to holders. That restriction was designed to keep stablecoins from competing with bank deposits too aggressively.
But the law left open the extent to which affiliates and third parties may offer interest or rewards. Coinbase already pays rewards on USDC balances. PayPal pays rewards on PYUSD. Banks have criticized those structures as workarounds that pull deposits out of the regulated banking system.
Open USD takes that workaround and scales it. By distributing reserve income across 140-plus partners, each partner can decide how to pass rewards to users — through cashback, liquidity mining, lending boosts, or trading fee discounts. The issuer never pays interest directly. The partners do.
The Verdict: Competition Is Coming for Your Stablecoin Dollars
Open USD is not live yet, and its planned launch on Plasma and Tempo later this year will be the real test. But the strategy is clear: turn stablecoin holding into something that pays you back, not through the issuer but through the ecosystem around it.
For DeFi users, that means watching which lending platforms, DEXs, and wallets integrate Open USD first. If the incentives are real — if partners actually pass along reserve income — then yields on Open USD positions could outpace those on USDC and USDT. If they do not, the token becomes just another dollar in a crowded field.
The broader message is that stablecoin competition is entering a phase where users get paid. After years of issuers capturing all the float, the next digital dollar may need to share. For anyone holding crypto dollars in a wallet, lending platform, or exchange, that is a shift worth watching.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry risk; always do your own research.
140 partner companies at launch is wild. USDT and USDC had years to build moats and Visa just kicks the door in with a rewards-sharing model
mikael_re 140 partners sounds great until you realize Visa dictates the terms. they dont join networks, they absorb them
sharing reserve earnings with partners is actually huge. USDT and USDC kept all that T-bill float for themselves forever, now Visa and Mastercard get a cut? good luck competing with that
tether made 7B from reserves last year and shared zero with anyone. open usd flips that model entirely
free minting and redemption at unlimited volume is aggressive. someone is absorbing gas costs and I doubt its charity
visa and mastercard entering stablecoins means USDC and USDT are cooked long term. they own the distribution
the reserve revenue sharing is actually huge. Tether keeps 100% of the T-bill yield and everyone just accepts it. open standard flips that completely
^ exactly. usdt printed 7B in profit last year just from reserves. distributing that to integrators changes the whole incentive structure
140 partner businesses at launch is not small. this is basically Visa saying ok we will route stablecoin payments now and take a piece of the yield. feels different from the usual L2 token launch hype
free minting and redemption at unlimited volume lol. so who absorbs the cost when someone redeems 50M in a panic? the management fee better cover gas and slippage or this breaks on day one
call me skeptical but Visa and Mastercard dont enter anything unless they control it. watch them slowly capture the governance of this thing
the real question is what happens when Tether fights back. they have 184B in circulation and armies of lawyers. Open USD has Visa but USDT has liquidity
184B USDT in circulation and Tether shares zero yield with integrators. Open USD splits reserve revenue with 140 partners. this is a direct attack on the most profitable business model in crypto
settlement_rat_ tether made 7B from T-bills last year. even splitting half of that with Visa and partners would still be more profitable than anything in defi. the math actually works