Circle Chief Executive Jeremy Allaire has defended USDC’s long-term position, arguing that stablecoin success is built over years through liquidity, regulatory approvals, and everyday use rather than lower fees or short-term incentives.
Allaire shared his views after members of the crypto community asked about OUSD, a new stablecoin backed by a group of industry companies. In a post on X, he said stablecoin networks become stronger as more businesses, developers, financial institutions, and payment providers adopt them, making it harder for newer competitors to catch up.
To support his argument, Allaire cited data from blockchain analytics firm Artemis, which showed USDC processed nearly $30 trillion in on-chain transactions during the first quarter of 2026. He said the figure represented about 80% of dollar-backed stablecoin transaction volume during the period, with USDT accounting for most of the remaining share.
We’ve had lots of questions from our investor community looking for thoughts on OUSD, and so I thought I’d share my direct views here for anyone.
Stablecoin networks are platform and network effect businesses that are established over a long period of time, tend towards…
— Jeremy Allaire – jerallaire.arc (@jerallaire) July 1, 2026
Circle questions OUSD’s strategy
Allaire pushed back against several ideas promoted by OUSD, including free minting and redemption, revenue-sharing among participants, and governance through a consortium of companies.
He said stablecoin issuers need sustainable revenue to invest in banking relationships, compliance, payments infrastructure, and liquidity. He also argued that large consortiums often struggle to make decisions because members have different priorities.
Despite those concerns, Circle welcomed OUSD’s launch and said it expects many of the companies behind the project to remain USDC partners.
Why do most new stablecoins struggle to gain traction?
The stablecoin market is full of projects that attracted attention at launch but failed to build lasting adoption. Coins such as USDP, GUSD, and PYUSD entered the market with strong backing and well-known partners, yet they remain much smaller than USDT and USDC in both circulation and daily use.
The biggest challenge is getting exchanges, payment companies, wallets, banks, and businesses to use it every day. Without that support, users have fewer places to spend, trade, or transfer the token, making it harder to compete with established rivals.
That is why the market has remained heavily concentrated around a handful of stablecoins. New entrants may offer lower fees or different business models, but lasting success usually depends on building trust, liquidity, and everyday use over many years rather than winning attention at launch.
In another development, Circle minted another 1 billion USDC on the Solana blockchain, bringing its total issuance on the network to 3.5 billion USDC over the past seven days.
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