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

Odaily Odaily, Jeremy Allaire, co-founder of Circle, has publicly responded to the competition from OUSD. He stated that stablecoin networks are inherently internet platform-style businesses, exhibiting a long-term "winner-takes-most or winner-takes-all" structure, where network effects and liquidity are the decisive factors. On the competitive front, Allaire questioned the "consortium stablecoin" model adopted by OUSD and others. He argued that multi-party alliance structures are prone to slow decision-making, misaligned incentives, and weak long-term execution. Historically, projects like Diem have proven the difficulty in scaling such a model. Furthermore, while mechanisms like free minting/redeeming, yield distribution, and governance structures are theoretically attractive, the real-world market requires stable profitability to support infrastructure investment; otherwise, long-term network building capacity 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. It will simultaneously advance cross-chain and payment infrastructure like CCTP and CPN, and welcomes OUSD's entry into the industry's competitive landscape. Ultimately, network effects will determine the winners.