Circle Co-founder Responds to OUSD Competition: Consortium Stablecoins Are Hard to Succeed; Ultimately Network Effects Will Decide the Winner

Odaily News: Circle co-founder Jeremy Allaire posted a response to competition from OUSD, stating that stablecoin networks are essentially internet platform businesses, characterized by a "winner-takes-all or winner-takes-most" structure in the long run, with network effects and liquidity being decisive factors. On the competitive front, Allaire questioned the "consortium stablecoin" model represented by 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 proven that such a model struggles to scale. Furthermore, although mechanisms like free minting/redemption, yield distribution, and governance structure design are theoretically attractive, real-world markets require 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 for collaboration, working with various institutions and stablecoin issuers to expand the ecosystem, while advancing cross-chain and payment infrastructure such as CCTP and CPN. He welcomed OUSD to join the industry competition, ultimately leaving the outcome to be decided by network effects.