Original | Odaily Planet Daily ( @OdailyChina )
Author | Asher ( @Asher_ 0210 )
Starting this month, USDC has welcomed a victory moment in the European crypto market.
With the end of the MiCA transition period, unauthorized crypto asset service providers will no longer be able to operate in the EU. For crypto exchanges, continuing to stay in the European market means that not only the platform itself needs to be compliant, but the assets and trading pairs supported by the platform must also be readjusted, with stablecoins being the first to address this.
In the past, the default answer for dollar stablecoins was often USDT. However, Tether did not apply for a MiCA license. When Tether CEO Paolo Ardoino explained why USDT did not apply for the EU MiCA license, he stated that the regulation was “very dangerous for stablecoins.” This indicates that USDT has proactively abandoned the European stablecoin market.
However, the demand for dollar stablecoins in the European market will not disappear. Users need dollar stablecoins, platforms need dollar trading pairs, and institutional funds also need a clearer compliant pathway for on-chain dollar assets. The demand that was primarily covered by USDT in the past is now beginning to shift toward compliant stablecoins.
Long before the end of the MiCA transition period, Circle had already obtained a French EMI license and included USDC and EURC in the MiCA framework. For Circle, this is precisely the opportunity for USDC to rise in Europe.
USDT Trading Entry Shrinking, USDC Meeting European Demand
The actions of crypto exchanges are more direct than regulatory documents.
For instance, Binance has previously delisted non-MiCA-compliant stablecoin trading pairs such as USDT, FDUSD, TUSD, DAI for users in the European Economic Area, while retaining USDC, EURI, and Euro trading pairs. Coinbase has also stated it will restrict stablecoin services that do not meet MiCA requirements and provide European Economic Area users the option to switch to compliant stablecoins like USDC and EURC.
These adjustments do not mean that USDT is completely banned in Europe. Users can still hold USDT on-chain and continue to use it in certain scenarios, but the trading entry for USDT in compliant exchanges is indeed being compressed.
In the past, USDT’s advantage came from the virtuous cycle of scale effects—the more trading pairs available, the more users got accustomed to it; the more users got accustomed, the more exchanges relied on it. After MiCA, this cycle has been interrupted in Europe. For exchanges, the premise of continuing to serve EU users is to minimize compliance risks as much as possible. Therefore, they will prioritize retaining assets with clearer compliant pathways when it comes to stablecoin trading pairs.
Open USD is Coming Strong, but USDC's Moat is Still There
On June 30, Open Standard announced the launch of a new dollar stablecoin Open USD, which is supported by over 140 companies, including Visa, Stripe, Mastercard, BlackRock, and Coinbase; and Open USD allows free minting and redemption, planning to share reserve earnings with partners after deducting management fees. Upon this announcement, Circle's stock plummeted, falling by as much as 16% during the day.
The market's concerns are understandable. The lineup for Open USD looks luxurious enough, and the model seems almost aimed at USDC. On one hand, there are payment giants, trading platforms, and asset management institutions sharing the stage, and on the other, there is a profit-sharing mechanism. If this model really works out, it could indeed capture a part of the stablecoin market that originally belonged to USDC.
However, the list of “over 140 partners” quickly came under question.
Shortly after Open Standard's announcement, some of the South Korean companies listed began clarifying that they had not formally participated in the Open USD project. According to reports, Samsung Electronics stated that there had been no formal negotiations regarding the OUSD project; Dunamu mentioned that they only reviewed related proposals; Upbit went further, clearly denying participation in the OUSD issuance; K Bank also denied the existence of any formal agreement.
See the detailed report “Is the 'Hundred Partner List' for OUSD Just a 'Letter of Intent'? The Marketing by Proxy Sparks a Trust Crisis.”
Stablecoin is not a business that can be successfully run just by displaying partner logos. Issuing, redeeming, providing market-making, exchange depth, on-chain liquidity, payment scenarios—each link needs to be honed over a long time. A luxurious list does not mean that capital will actually migrate, nor does it mean that users will immediately abandon USDC. Circle's stock drop due to Open USD competition is merely an overreaction from the market to the competitive anxiety.
Additionally, Circle CEO Jeremy Allaire has responded directly to the OUSD competition, stating that the ultimate competition for stablecoins is network effects. The application integration, global liquidity, regulatory licenses, banking relationships, and payment infrastructure accumulated by USDC over nearly a decade is Circle's true moat. He also questioned consortium-style stablecoins like OUSD, noting that while multi-party alliances may look grand, the more participants there are, the slower the decision-making becomes, and the incentives may become harder to align fully. Free minting, free redemption, and profit sharing sound very attractive, but the stablecoin infrastructure itself requires continuous investment. Lacking stable profitability to support it, long-term network construction may actually be impacted. (For more related content, see: Circle CEO responds to OUSD challenge: Stablecoins have a “winner takes all” dynamic, alliance models are doomed to fail)
Open USD does pose pressure on Circle, but it cannot yet be said to rewrite the landscape of the stablecoin market. It more resembles a loud prelude to competition; to truly challenge USDC, they first need to prove they can generate liquidity, scenarios, and long-term execution capability.
In This Game in Europe, Circle is in a More Favorable Position
USDT remains one of the most dominant stablecoins globally, and Open USD will continue to bring new imaginative space to the market. The competition for stablecoins will not end with the implementation of MiCA; instead, it will become fiercer.
However, the European market has already given a clear signal. Stablecoins that can remain in mainstream trading and institutional scenarios in the long term cannot rely solely on liquidity and user habits; they also need to have a sufficiently clear compliant identity.
This is precisely Circle's opportunity. While USDC may not immediately replace USDT, its position in compliant trading scenarios in Europe is becoming increasingly important. As exchanges, payment institutions, and institutional funds gradually turn towards more compliant on-chain dollar assets, Circle has the opportunity to transform USDC from an “alternative option” into one of the core stablecoins in the European market.
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