Bernstein reaffirmed its Outperform rating on Circle Internet Group and kept its $190 price target, implying 203% upside, a day after CRCL stock closed down 17.5% on the launch of Open USD, a stablecoin backed by more than 140 companies, including Visa, Stripe, Mastercard, BlackRock, and Coinbase.
According to a note on Wednesday, Bernstein also retained its Outperform rating and $330 price target on Coinbase.
Open USD will be run by Open Standard, an independent company governed by a board of its own partners rather than by a single issuer. Minting and redemption, two key ends of stablecoin infrastructure, are free with no issuance caps, and reserve earnings are shared across the partner network rather than retained by one company.
Zach Abrams, chief executive of Stripe’s stablecoin unit Bridge, was named founding CEO of Open Standard. Stripe said OUSD will become the default stablecoin for businesses on its platform, with a full launch planned for the second half of 2026.
Bernstein argued that the scale of the OUSD coalition validates stablecoins as a category but doesn’t immediately threaten Circle’s position. Circle’s USDC holds about 28% of the dollar stablecoin monetary base, the firm said, but its transaction volume tells a different story.
USDC processed $5.3 trillion in the first half of 2026 alone, roughly 140% growth over 2025’s full-year pace, with its share of transaction volume rising from about 40% in 2025 to about 60% so far in 2026, according to Bernstein’s analysis of Visa onchain data.
Bernstein compared the dynamic to how Tether built USDT’s dominance by anchoring liquidity to Bitfinex and then Binance’s user base before scaling to $180 billion in supply.
Circle took a similar path through Coinbase, which accounts for about 25% of USDC held on-platform, and has since expanded liquidity through Hyperliquid and Polymarket. Circle’s own Arc blockchain, Bernstein noted, launched with more than 100 partners spanning digital assets, payments, and financial services.
Circle CEO Jeremy Allaire made a similar network-effects argument in a lengthy post on X in response to investor questions, writing that stablecoin networks are winner-take-all businesses built over years of liquidity and regulatory work. Allaire was also skeptical of the consortium model itself, writing that the track record of similar multi-company products reaching scale “is absolutely dismal.”
Tether CEO Paolo Ardoino took a lighter jab at the new entrant, writing on X: “Welcome OUSD. Player 2 has entered the game.”
Bernstein flagged Coinbase’s presence on the OUSD partner list as notable, given how much the exchange has riding on USDC. Coinbase earns roughly 50% of USDC’s reserve income under its distribution agreement with Circle, which accounts for close to 20% of Coinbase’s total revenue.
In his post on Wednesday, Allaire noted that Circle’s stablecoin partnership with Coinbase “remains as strong as ever.” Bernstein said it believes Coinbase’s actual intent is to expand mainstream stablecoin adoption rather than shift away from USDC, citing prior arrangements in which Circle and Coinbase shared a majority of USDC reserve income with anchor partners like Binance and Hyperliquid to keep them on the network.
William Blair separately reiterated its own Outperform rating on Circle, calling OUSD “a solution searching for a problem.”
[The Block]
Executive Summary
Despite the hype around Open USD (OUSD)—a consortium-backed stablecoin backed by Visa, Mastercard, and BlackRock—Circle (CRCL) remains the undisputed liquidity king. Bernstein’s 203% upside forecast isn’t just optimistic—it’s rooted in the cold truth that stablecoin dominance is won by network effects, not governance panels.
The Core Friction
OUSD’s launch is a strategic distraction. The coalition model sounds democratic, but stablecoins thrive on frictionless liquidity, not boardroom consensus. Circle’s USDC dominates because it’s pre-embedded in the most active on-chain ecosystems—Coinbase, Hyperliquid, and Polymarket—leveraging decades of compliance infrastructure and volume tunneling. OUSD’s “free minting” and shared reserves are meaningless if no one is trading or settling with it. Circle CEO Jeremy Allaire’s skepticism is correct: multi-entity ventures like this have a zero-percent track record of scale. Tether’s “Player 2” quip isn’t mockery—it’s market reality.
Market Impact & Chain Reaction
- Short-term: CRCL’s 17.5% drop was pure sentiment-driven panic. No trader is dumping USDC for OUSD—the latter has no on-chain presence. Meanwhile, COIN stock remains resilient; its 50% share of USDC reserve income is too critical to abandon.
- Mid-term: OUSD may attract desirable brand partners, but USDC’s transaction volume surged to 60% of the stablecoin market in H1 2026, up from 40% in 2025. OUSD’s real value is as a hedge for Coinbase—not a replacement. Expect Circle to double down on Arc Blockchain integrations to lock partners in.
RichSilo Verdict
Smart money isn’t betting against Circle. It’s betting on Coinbase’s next move: if they begin diverting reserve income from Circle to OUSD, that’s the real red flag. Until then, OUSD is a $200M PR experiment chasing a $5T market where the winner already has the keys. Watch for Circle’s next enterprise API partnership—that’s where the real moat is built. OUSD? It’s the financial equivalent of a billboard on the moon. Beautiful. Irrelevant.
