Circle Co-Founder Responds to OUSD Competition: Consortium Stablecoins Will Struggle to Succeed, Network Effects Will Ultimately Decide the Outcome

Odaily Planet Daily News: Circle co-founder Jeremy Allaire publicly responded to the competition from OUSD. He stated that the stablecoin network is essentially an internet platform-based business, which over the long term exhibits a "winner-takes-most or winner-takes-all" structure, where network effects and liquidity are the decisive factors. On the competitive front, Allaire questioned the model of "consortium stablecoins" like OUSD, arguing that multi-party alliance structures are prone to slow decision-making, misaligned incentives, and insufficient long-term execution capabilities. Historically, projects like Diem have already proven the difficulty of scaling such a model. Furthermore, while mechanisms like free minting/redemption, yield distribution, and governance structure designs are theoretically attractive, the real-world market requires stable profitability to support infrastructure investment; otherwise, long-term network building capabilities may be weakened.

Jeremy Allaire added that Circle will continue to be open and cooperate with various institutions and stablecoin issuers to jointly expand the ecosystem. At the same time, it will advance the development of cross-chain and payment infrastructure like CCTP and CPN. He also welcomed OUSD to join the industry competition, stating that the outcome will ultimately be determined by network effects.