The news: More than 140 payments, finance, and retail players announced Open USD, a dollar-backed stablecoin for global money movement, per a blog post.

• Businesses can mint and redeem Open USD fee-free without redemption volume limits.
• All participating players will receive earnings from Open USD’s reserves.
• Open USD will be governed by Open Standard, an independent company run by a board of partner representatives. Zach Abrams, CEO of Bridge, will operate as the CEO of Open Standard.

Businesses backing Open USD include Visa, Mastercard, Stripe, Klarna, Affirm, Western Union, Google, Shopify, DoorDash, Coinbase, Gemini, Wix, Rakuten, and U.S. Bank.

How we got here: The stablecoin industry is maturing. Incumbents are adopting on-chain technology to make cross-border transactions faster and cheaper, increasing the tech’s legitimacy.

• The Clearing House and Zelle-owner Early Warning Services intend to issue a joint stablecoin.
• A consortium of global banks are also considering launching a stablecoin-esque digital currency for on-chain payments across G7 countries.

Zooming out: Conspicuously absent from the extensive partner list are some of the largest US banks—like JPMorgan and Bank of America.

Open USD’s consortium is stocked with major payment networks, fintechs, BNPL players, and banks outside EWS’ circle. (U.S. Bank is the only EWS-consortium bank to participate in Open USD; U.S. Bank and BNY are also TCH member banks.)

The two stablecoin consortia are betting on the massive scale of their respective networks to accelerate adoption and become the dominant stablecoin payment method. 

But in both cases, the threat of infighting risks destabilizing these alliances.

• Klarna, Fiserv, and many other Open Standard participants have announced plans to develop their own proprietary stablecoins.
• EWS participants are also exploring their own crypto tokens. JPMorgan has developed a digital deposit token, and Bank of America said it wanted to issue a stablecoin. 

Implications for payment providers: Battle lines are being drawn between EWS/TCH and Open Standard for stablecoin dominance. 

Including retailers within its consortium could give Open Standard the edge to jump-start stablecoin settlements at the consumer level. Financial plumbing firms like Visa's and Mastercard’s participation could stop them from getting disintermediated if retailers ditch card acceptance for crypto to save on fees.

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