ARK Invest research director Lorenzo Valente said a proposed OpenUSD stablecoin backed by a consortium of major financial and crypto firms faces significant structural and regulatory obstacles.
According to ChainCatcher, Valente argued that entrenched network effects around USDC and USDT create a “cold start” liquidity problem that could make it difficult for a new stablecoin to secure trading pairs and broad adoption across exchanges, payment processors, and brokers.
He also said decision-making could be slow and conflict-prone in a consortium of roughly 500 competitors, citing a lack of successful precedents for such governance. Valente added that regulatory and antitrust scrutiny could be high if large banks and card networks jointly issue a currency.
Valente further questioned the project’s economics, saying a revenue-sharing model could leave issuers with too little retained capital to cover operating and marketing costs. He also said many partners’ commitments appear limited to non-binding letters of intent, while participants may continue supporting competing products rather than committing exclusively.
Valente concluded that OpenUSD resembles a “DAO of competitors,” which could struggle to execute quickly and risk governance failure similar to early DAO projects.
ChainCatcher reported that Circle’s U.S.-listed shares fell more than 17% in a single day amid the OpenUSD plan, and that ARK Invest bought shares following the drop.