Woofun AI reports that the stablecoin landscape was shaken on June 30, Beijing time, when Open Standard announced the launch of Open USD (OUSD), an event that immediately precipitated a sharp decline in Circle’s market valuation. The announcement, detailed by Eric in Foresight News, introduced a stablecoin model built on free creation and redemption, profit sharing from reserve assets, and collaborative governance among partners. These features were designed to address core distribution challenges in the stablecoin sector, presenting an attractive alternative to existing models.

However, the most startling element of the launch was Open Standard’s claim that it had already secured agreements with over 140 partners prior to the token’s debut. This list included major entities such as Western Union, Ripple, MetaMask, and Aave, many of which already operate their own stablecoin or related financial products. The sheer scale of these purported partnerships generated significant market anticipation, suggesting a rapid consolidation of support across both Web3 and traditional finance sectors.

The immediate market reaction to this announcement was severe for incumbent players. Circle, recognized as the first company to issue a stablecoin, saw its stock price plummet by 17.55% on the day of the launch. This single-day drop brought the company’s valuation within less than 20% of a new low, reflecting investor anxiety over the potential disruption posed by OUSD’s open-design features. The magnitude of the decline underscored the market’s sensitivity to competitive threats, particularly those that promise to dismantle existing profit structures through decentralized governance and partner-centric revenue models. The volatility highlighted the precarious position of established stablecoin issuers in the face of aggressive new entrants claiming broad industry backing.

However, the credibility of Open Standard’s partner list was quickly challenged. On July 3, several prominent Korean companies publicly denied any formal partnership with OUSD. Samsung Electronics, Dunamu (the parent company of Upbit), Shinhan Financial Group, and K Bank all stated that they had never engaged in discussions regarding Open USD. A representative from Samsung Electronics clarified that there were no formal talks and that the company was unaware of any potential role in such an alliance. Similarly, Shinhan Financial Holdings, Dunamu, and K Bank explained that while Open Standard had inquired about their interest, their tentative responses were misinterpreted as commitments. Tony Chung, head of South Korean Web3 media outlet Blockmedia BD, noted that one Korean representative learned of their inclusion in the partner list solely through media reports, expressing confusion over how a casual reply of 'We’ll consider it if it’s feasible' was transformed into a confirmed partnership.

The controversy extended beyond South Korea, with global entities also disputing their association with OUSD. Gabor Gurbacs, founder and CEO of OpenAssets, amplified these concerns by sharing Tony Chung’s tweet and revealing that the issue was not isolated to Korean firms. After contacting several clients listed as partners, Gurbacs received consistent denials, with companies stating they had never signed or agreed to any agreements. He suggested that either the media had severely distorted the facts or the list of participants was fundamentally misleading. This pattern of denial implies that Open Standard’s 'list of 100 companies' may have included entities that were merely contacted, rather than those that had formally committed. The original announcement claimed that 'companies across various industries have signed up to use Open USD,' but the subsequent backlash suggests that Open Standard may have interpreted the absence of a clear refusal as implicit agreement, a tactic that blurs the line between interest and commitment.

In response to these developments, Jeremy Allaire, co-founder and CEO of Circle, published a detailed critique on X Corp, questioning the viability of OUSD’s three key features. He argued that free creation and destruction, while attractive in the short term, could prove unsustainable at scale due to the lack of funds needed to maintain banking relationships, regulatory approvals, and technical infrastructure. Allaire noted that Circle already offers discounts to major partners through contracts rather than full freedom, suggesting that OUSD’s model might 'starve' its own infrastructure by diverting almost all profits to partners. He also criticized the concept of alliance or multi-company governance, citing the historical track record of such structures as 'very poor' due to slow coordination and difficult decision-making. Allaire referenced Circle’s previous formation of the Centre Consortium with Coinbase before integrating it, implying that centralized control is more effective for scaling. Despite his criticisms, Allaire expressed openness to OUSD joining the 'stablecoin family,' though he emphasized that the industry tends toward winner-takes-all outcomes, where minor mechanical tweaks are insufficient for success.

Woofun AI data shows that despite the controversies, some high-profile entities have confirmed their support for OUSD. Stripe announced it would set OUSD as the default stablecoin for businesses using its platform, signaling a significant endorsement from a major payment processor. Coinbase also stated it would integrate OUSD into Base and other on-chain platforms, with plans to launch by late 2026 to expand on-chain transactions, payments, and DeFi applications. Payment network giants Visa and Mastercard, along with financial institutions such as BlackRock and JPMorgan Chase, expressed support, though specific cooperation methods remain undefined. Crypto-native projects like Aave, SOL, and Ripple also voiced backing, indicating that OUSD has secured tangible alliances even as others deny involvement. This mix of confirmed and disputed partnerships creates a complex picture of OUSD’s market position, highlighting both its potential reach and the risks associated with its marketing claims.

The leadership behind Open Standard adds another layer to the narrative. The founder and CEO of Open Standard is also the CEO of Bridge, a company that previously collaborated with competitors in the dispute over the issuance rights of Hyperliquid’s native stablecoin USDH. Bridge was later acquired by Stripe, which is now developing the controversial fiat-on-rail solution for Tempo, its own stablecoin chain. Stripe’s confirmation of its partnership with Open Standard shortly after the announcement underscores a close connection between the two entities. This background suggests that OUSD is not operating in a vacuum but is part of a broader strategic effort by Stripe and its affiliates to influence the stablecoin market. The involvement of Stripe, a dominant player in digital payments, lends credibility to OUSD’s technical and operational capabilities, even as its marketing tactics face scrutiny.

The ethical implications of Open Standard’s marketing strategy have been widely debated. A user named Bojan on X characterized the approach as 'legitimacy-borrowing,' a tactic where a company leverages the reputation or endorsement of well-known entities to boost its own credibility without genuine recognition or official approval. This practice, while effective in generating attention, raises questions about transparency and trust in the financial sector. By listing companies that had not formally committed, Open Standard created an illusion of widespread support that was quickly dismantled by public denials. This incident highlights the importance of accurate representation in marketing, particularly in an industry where trust is paramount. The backlash against OUSD’s claims serves as a cautionary tale for other projects seeking to gain traction through aggressive or misleading promotional strategies.

For the stablecoin industry, which relies heavily on trust and regulatory compliance, the OUSD controversy has left lasting negative impressions. The incident underscores the fragility of market confidence when faced with unverified claims and aggressive marketing tactics. While OUSD has secured some genuine partnerships, the damage to its reputation from the disputed list may hinder its long-term adoption. The episode also reinforces the dominance of established players like Circle, which continue to navigate the complex landscape of regulation and competition with greater caution. As the industry evolves, the balance between innovation and integrity will remain a critical factor in determining which projects succeed and which falter under scrutiny.