Visa, Mastercard, Stripe and BlackRock have launched a rival stablecoin. The circle fell 17 per cent in a day. The fight is over something called the float.
July 2026 · Money & Payments
A consortium of more than 140 companies — Visa, Mastercard, American Express, Stripe, Coinbase, BlackRock, BNY, Standard Chartered, Google and IBM among them — has launched a new stablecoin called Open USD. Circle, which issues the incumbent USDC, fell around 17 per cent on the day to a four-month low.
To understand why a stablecoin launch moved a share price that violently, you need to know one thing about how stablecoins make money. It is not complicated, and almost nobody explains it.
Where your dollar actually goes
When you hold a dollar-pegged token, the issuer takes your actual dollar and buys a US Treasury bill. That bill pays interest. You get a token worth a dollar. They get the interest. With something over $300 billion now parked in these things, that interest — the float, the good bit, the part that never appears in the marketing — has become one of the more profitable arrangements in modern finance.
Open USD proposes that the float be shared, businesses mint and redeem it free of charge, and nearly all reserve income flows back to the partners rather than to a single issuer. Governance sits with an independent company, Open Standard, whose board is drawn from the partners themselves.
What stung Circle particularly is that some of Open USD’s backers — BlackRock and BNY among them — are also partners in Circle’s own ecosystem. Its chief executive was publicly unbothered and pointed to the size of the opportunity ahead. He may well be right. He would also say that.
Seigniorage, a very old idea
For most of recorded history, the right to issue money has been among the most lucrative privileges going. Economists call the profit seigniorage, the French seigneur, the feudal lord who ran the mint, took your silver, stamped his face on it, then returned slightly less silver than you gave him and pocketed the difference. Nice work, if you can get the monopoly.
Stablecoins are seigniorage rediscovered, rather more elegantly. Nobody shaves the coin. You get precisely one dollar back whenever you ask. The issuer keeps every penny your dollar earned while in their care — which, at current rates, on Tether’s $145 billion, is a business most feudal lords would have envied.
The consortium’s argument, unstated but perfectly audible, is this: Visa routes the payments, Stripe runs the checkout, Shopify holds the merchants. Why should the issuer keep the float when we supply the entire economy that creates it?
This is a revolt, and it is a revolt about the float.
And for the rest of us
Every time you leave money somewhere convenient — a current account, a payment app, a stablecoin — somebody earns interest on it, and it is generally not you. That is not a scandal; it is the business model, and it has been the business model since the goldsmiths of the seventeenth century worked out they could lend the gold they were merely storing. Understanding that one sentence is, more or less, why I write about money at all.
So the habit worth taking from this is to ask: who earns the float on my money while it sits still? Sometimes the answer is fine, and the convenience is worth it. Sometimes the answer is that you have lent a company several thousand pounds, interest-free, indefinitely, because moving it felt like a chore on a Sunday.
The incumbents stir
The banks are watching nervously, too. JPMorgan has argued that stablecoin issuers should face the same liquidity rules as banks because interest paid on digital wallet balances allows crypto firms to compete for deposits without a bank’s obligations. Whether that is prudent regulation or incumbents pulling up the ladder is a question with a serious case on either side, and I shan’t pretend otherwise.
The caveat
Open USD has not actually launched. It is expected later this year, across Solana, Base and others. Consortium projects have a long and colourful history of struggling to agree on lunch, let alone reserve policy, and 140 partners means a great many competing interests around one table — several of whom, Visa and Mastercard for instance, spend the rest of the week competing furiously.
What the launch does tell us is where this technology has arrived. We are no longer arguing about whether digital dollars are real. We are arguing about who keeps the interest on them, the oldest argument in finance, conducted by the newest available means, and for once conducted in public rather than in a vault.
Which is one more reason to know exactly what you own, including who profits from your patience.
Educational commentary, not financial advice. Capital is always at risk.
The Jacqueline Brand — knowledge builds confidence, confidence builds wealth. This is editorial commentary for inspiration, not financial or professional advice. Always do your own research. The Collection
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