Circle Co-Founder Responds to OUSD Competition: Consortium Stablecoins Face Challenges, Network Effects Will Ultimately Decide the Winner

Odaily Planet Daily News: Circle co-founder Jeremy Allaire has publicly responded to the competition from OUSD, stating that stablecoin networks are essentially internet platform-based businesses, exhibiting a long-term "winner-takes-most" structure, where network effects and liquidity are the decisive factors. In terms of competition, Allaire questioned the "consortium stablecoin" model adopted by OUSD and others, 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 demonstrated the difficulty of scaling such a model. Furthermore, while features like free minting/redemption, yield distribution mechanisms, and governance structures are theoretically attractive, the real-world market requires stable profitability to support infrastructure investment; otherwise, long-term network building capabilities may be undermined.

Jeremy Allaire added that Circle will continue to remain open to collaboration, expanding the ecosystem with various institutions and stablecoin issuers while advancing cross-chain and payment infrastructure like CCTP and CPN. He welcomes OUSD to join the industry competition, ultimately leaving the outcome to be determined by network effects.