Circle Long-Short Clash: OUSD Makes a Splash, Is Circle's Moat Still Intact?

Author: Biteye

Dozens of financial companies including Visa, Stripe, Mastercard, BlackRock, and Coinbase are promoting a new stablecoin called OUSD. As soon as the news broke, CRCL stock price dropped immediately.

If traditional finance, payment networks, and exchanges start jointly issuing stablecoins, how much of USDC's moat is left? The plummet in CRCL stock price is essentially a concentrated release of this concern.

So the question is: Is Circle an overvalued "interest spread-eating bank," or a stablecoin infrastructure leader wrongly punished by the market?

Please see the Circle bull-bear debate, main points from both sides👇

📈 Bullish on Circle / The Stablecoin Cake Will Be Enlarged

First Debater Da Yu @BTCdayu I XHunt Rank 657

Da Yu is neutrally bullish, believing CRCL is like early Tesla, stablecoin compliance is like an open-source trend, the long-term market will grow, but the process won't be smooth.

He believes USDC remains the most important player in the compliant stablecoin track, but the moat is not forever safe, facing three types of challenges in the future: new stablecoin competition, Coinbase revenue sharing pressure, and how much market compliant B-end USDC can actually capture.

Core Viewpoint: CRCL is worth observing and long-term attention, but cannot be held solely on faith. What truly determines valuation is whether the C-end, trading scenarios, prediction markets, and other ecosystems will choose USDC, USDT, or other stablecoins.

Second Debater Crypto Skanda @thecryptoskanda I XHunt Rank 1008

Crypto Skanda stated: Based on experience, when seven or ten ministries issue documents, it's much ado about nothing, but if one like the Ministry of Public Security or Organization Department issues a document, something big is happening.

Core Viewpoint: The more co-signers, the less responsibility anyone takes. This applies to official documents, and also to stablecoins.

Third Debater Lan Hu (@lanhubiji) XHunt Rank 1506

Believes OUSD will not end the stablecoin war, nor completely win the stablecoin market, but it can indeed grab a piece of the cake.

Although OUSD has 140+ companies behind it, including Visa, Mastercard, BlackRock, Coinbase, Stripe, Shopify, Google, etc., naturally possessing payment channels, merchant networks, bank partnerships, and institutional resources, there are opportunities to quickly enter in scenarios like enterprise payment, settlement, cross-border remittance, RWA, etc.

Core Viewpoint: OUSD will not easily replace USDT / USDC. USDT still has the strongest liquidity and trading depth, USDC is already ahead on the compliance route, transparency and institutional adoption are not bad. OUSD will bring pressure to Circle, but does not represent the end of USDC.

Fourth Debater Honest Mr. Mai @Michael_Liu93 I XHunt Rank 1708

Mr. Mai believes the market is overly worried about Circle being replaced by traditional finance giants entering the field. Stablecoins are not simply about issuing a coin, but require channels, user mindshare, trading scenarios, and long-term liquidity accumulation.

Many large platforms have tried stablecoins in the past: Binance's BUSD / FDUSD / TUSD, Hyperliquid's USDH, Huobi's HUSD, OKX's USDK, Gemini's GUSD, Kraken's USDG, Tron's USDD, finally the ones that truly emerged are still mainly USDT and USDC.

Core Viewpoint: Stripe, Visa, Mastercard, BlackRock, Coinbase doing stablecoins together is not to eliminate USDC, but will jointly expand the stablecoin payment and consumer-grade crypto market. Traditional finance opening entrances may instead benefit USDC and USDT.

Fifth Debater wu fan @wufantouzi I XHunt Rank 2687

Believes the market truly questions not the stablecoin track, but CRCL itself. But currently USDC is still the absolute leader in the compliant stablecoin track, although there are many competitors, data hasn't proven they can truly challenge USDC.

Core Viewpoint: Believes CRCL valuation shouldn't be viewed as ordinary financial stocks, but priced according to the long-term space of the stablecoin track. Previously estimated based on 24% market share, not defaulting that USDC captures 100% of the market.

For USDG and other new stablecoins, he believes short-term volume is greater than actual threat: USDG issuance is about 3 billion USD, market share less than 5% of USDC. Similar to every GPU manufacturer wanting to challenge Nvidia, but the leader's advantage is not shouted out.

🙅 Bearish on Circle / Stablecoins Have No Moat

First Debater Phyrex（@PhyrexNi）XHunt Rank 774

Believes USDC will still have a large market, especially in the US compliant crypto trading field, but Circle's problem is: it has talked about the USDC payment narrative for many years, truly encountering challenges from banks and payment giants.

What's truly difficult about stablecoins is not issuance, but "acceptance/redemption". Banks hold corporate accounts, cross-border settlement, payment networks, institutional clients, and USD deposit/withdrawal channels. If banks issue their own stablecoins, they are naturally more suitable for enterprise payment, institutional settlement, and cross-border scenarios.

Core Viewpoint: OUSD's starting point is not simply doing crypto trading, but aiming for payment and acceptance. What Circle can do, Open USD can also do. What Circle temporarily cannot do, Open USD relying on banks and payment networks might achieve instead.

Second Debater Colin Wu @colinwu I XHunt Rank 971

Believes whether it's CRCL stock price plummeting, or hundreds of authoritative institutions doing stablecoins together, it shows the stablecoin track will be reshaped by regulation and traditional finance in the long term.

Core Viewpoint: Stablecoins and other crypto products alike, the essential demand satisfied is "evading regulation". But as scale expands, stablecoins will inevitably be compliantized, demand might instead decrease. Once fully compliant, the difference between stablecoins and traditional digital dollars is not that big.

Stablecoins are centralized dollar-mapped currencies, not the so-called crypto industry "GPT moment". What truly determines the stablecoin landscape in the future is not just issuance volume, but regulation, application scenarios, and ecosystem within the circle.

Third Debater Xu Chonglang @cyrilxuq I XHunt Rank 1983

Believes stablecoins themselves do not have a strong moat, all Web2 banks, payment companies, Visa, Mastercard can enter the field.

Core Viewpoint: The true core technology of stablecoins is not in issuing coins, but in Card Organizations + Clearing Networks. If Visa can press settlement bank costs from 1.5% to 0.1% in the future, and directly connect issuing banks, merchants, on-chain KYC and payment networks, then users can swipe their own issued stablecoins directly on POS machines.

Fourth Debater Xiaoyao XTony @xtony1314 I XHunt Rank 3666

Believes comparing CRCL to Visa / Mastercard is nonsense. Visa earns payment channel fees, while Circle issues stablecoins, essentially earning from the interest spread between USD and Treasury bonds, the two business models are completely different.

Core Viewpoint: Users using USDC do not need to pay extra fees to Circle, so CRCL is hard to continuously take cuts like Visa. CRCL's core revenue comes from Treasury bond interest, but this part of revenue is not only affected by interest rate cycles, but also needs to share with Coinbase, profit model is not sexy.

He also believes, truly like Visa are ETH, Tron, Solana such public chains collecting "toll fees", not stablecoin issuers.

Fifth Debater Jiang Zhuoer @Jiangzhuoer2 I XHunt Rank 5213

As early as the end of 2025, he was not bullish on CRCL, believing Circle is essentially more like an "interest spread-eating bank," not a high-growth tech stock.

Core Viewpoint: CRCL main profit comes from Treasury bond interest income, but future rate cuts will compress spreads; at the same time need to share large profits with Coinbase, leading to profit ability not being stable.

He also believes, Circle's biggest risk is not competition, but policy. Stablecoins rely on Treasury bond interest income, but this model in the blockchain market belongs to "relying on policy to eat interest spread"; once regulation prohibits or limits related revenue distribution, the profit logic might be directly undermined.

🌟Both Sides Viewpoint Summary

Bullish Side Believes:

OUSD such new stablecoins currently more look lively, but no data proves they can truly challenge USDC.

Stablecoins not anyone can issue successfully, core lies in channels, liquidity, user mindshare and trading scenarios. Traditional finance giants entering, not necessarily coming to eliminate Circle, instead might be enlarging the stablecoin payment and consumer-grade crypto cake.

Bearish Side Believes:

Circle's moat is not as deep as imagined. Stablecoin issuance threshold is not high, what is truly valuable is payment clearing networks and financial channels, and these are exactly held in the hands of Visa, Mastercard, banks, and traditional financial institutions.

At the same time, CRCL mainly relies on Treasury bond interest to earn money; once rate cuts, sharing pressure increases, or regulation limits revenue distribution, valuation logic will be re-priced.