SS #114 - Circle Stock Drops on Open USD Launch

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Circle just found out the hard way that owning distribution means less than owning the reserve yield, as a 140-company consortium builds a stablecoin that gives that yield away, and the market punished the stock 17% in a single day.

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In Today's Edition:

• Headline: Circle Stock Drops on Open USD Launch

• Quick Bites: MetaMask launches Money Account

• Yield of the Week: sUSDM (Monetrix): 15.36% APY

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HEADLINE

State of play: Circle shares fell more than 17% to a four month low after the 140-plus company Open USD consortium launched, with markets reading the new stablecoin as a direct threat to USDC's reserve income model.

• Circle closed below $63, its weakest price since late February and down 55% from mid-May.

• The launch follows earlier reporting that Stripe, Visa, and Mastercard were building a rival platform before Coinbase joined as well.

• Open USD's revenue sharing model echoes Paxos-led USDG, backed by Robinhood, Kraken, and Galaxy Digital.

• Circle CEO Jeremy Allaire downplayed the threat, citing the stablecoin market's overall growth potential instead of addressing Open USD directly.

• The stablecoin market has surpassed $300B, with Citi projecting growth to $4T by 2030 as competition shifts toward controlling infrastructure.

What’s Next: Watch whether other stablecoin issuers announce similar reserve sharing models, and how Circle responds beyond verbal reassurance.

Why it Matters: A 17% stock drop shows markets pricing Open USD as a structural threat to Circle's Treasury yield business, not just another competitor.

Our Take: Circle's selloff shows markets pricing reserve yield sharing as a real threat, not a niche experiment. Its "welcome competition" response reads as the only line available with no immediate counter.

QUICK BITES

• French banking giant Crédit Agricole rolls out euro stablecoin, EURXT.

• MetaMask launches Money Account with yield and spending in one wallet.

• UK to lower stablecoin capital buffers, undercutting EU's MiCA requirements.

• Circle craters 17% as Stripe, Coinbase, BlackRock back rival stablecoin network.

• Bernstein sees 203% upside for Circle even as new stablecoin rival OUSD debuts.

YIELD OF THE WEEK

sUSDM (Monetrix): 15.36% APY

• The vault accepts USDC deposits, minted 1:1 into USDM and staked into sUSDM, with yield accruing automatically through exchange rate appreciation with no manual intervention required. TVL currently stands at $2.45M of a $5M mint cap.

• Capital is deployed through Monetrix's yield strategy, with sUSDM accumulating returns passively via an increasing exchange rate between USDM and sUSDM.

• Yield is generated from Monetrix's underlying strategies, delivering a 7-day average APY of 15.36% that accrues continuously through the sUSDM exchange rate.

SPICE Credit Vault (Accountable): 14.25% APY

• The vault accepts USDC deposits and allocates capital to Spice Credit's open-term credit strategy, with total deposits currently at $1M USDC, fully at capacity.

• Capital is deployed into Spice Credit's permissioned credit markets, with next redemption available on July 26, 2026 and a minimum deposit of 50,000 USDC.

• Yield is generated from credit market lending activity at a 15% native APY, net of a 0.75% performance fee, delivering a 14.25% expected net APY.

USD3/USDC LP (Pendle): 10.96% LP APY

• The pool accepts USD3 deposits, the senior tranche of 3Jane's credit-enhanced lending structure sitting first in the payment waterfall, maturing December 17, 2026, with ~$7.31M in pool liquidity and an ongoing $JANE emissions program.

• Capital is split across USD3 SY (~$3.63M, 49.73%) and PT USD3 (~$3.67M, 50.27%), earning a blended yield from underlying USDC interest, PENDLE rewards, and LP fees plus 173.78 daily PENDLE rewards.

• Yield is generated from 3Jane's lending pool interest distributed to the senior tranche, with LP APY composed of 9.20% USDC yield, 1.31% PENDLE rewards, and 0.44% LP

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