Open USD Pressure Grows as Circle Leaves Russell Indexes
- Circle’s Russell exit may reshape passive ownership and wider institutional demand.
- Open USD directly challenges Circle’s reserve income and enterprise distribution model.
- USDC retains regulatory strength as competition expands across enterprise payments.
Circle Internet Group has exited several Russell Growth indexes as Open USD launches with major financial and technology partners, adding pressure to the USDC issuer’s market position. The changes affect passive ownership, trading flows, and Circle’s exposure to investors who track growth benchmarks. Shares also fell nearly 15% after the Open USD announcement and touched their lowest level during the session.
Russell removals reshape Circle’s passive exposure
Circle now sits outside the Russell 1000 Growth, Russell 3000 Growth, Russell 3000E Growth, Russell Midcap Growth, and Russell Small Cap Comp Growth indexes. Funds linked to those benchmarks normally adjust their holdings whenever index providers change their membership lists.
As a result, the removals could trigger mechanical selling or reduce future buying among institutions that follow strict index-based strategies. The changes may also alter Circle’s shareholder mix, trading volumes, liquidity, and passive ownership levels.
Meanwhile, active fund managers may discuss the index action when explaining their Circle positions. Investors may also compare the company’s performance with that of other publicly traded cryptocurrency and payments businesses.
The index decision follows a sharp movement in Circle’s shares earlier this year. The stock climbed from $50 to $129 within six weeks before entering a weaker trading period. Will investors view the removals as a technical rebalancing event or a wider reassessment of Circle’s growth position?
Circle’s longer-term business model still centers on USDC adoption, tokenized capital markets, Arc, and the Circle Payments Network. However, its filing shows that Reserve Interest generated 99% of its revenue during 2024.
OpenUSD challenges Circle’s distribution model
Open USD targets enterprise users who help drive stablecoin adoption across global payment networks. Businesses can mint and redeem the token without fees, while participating partners retain reserve earnings after paying a small charge.
That structure directly affects a central part of Circle’s business model because the company depends heavily on interest from USDC reserves. Circle paid Coinbase $908 million during 2024 to support USDC distribution, according to its filing
Coinbase has now joined Open USD, which allows partners to retain reserve income after the platform fee. Therefore, one of Circle’s largest distribution partners now participates in a competing stablecoin network. Open Standard will manage the token through an independent board that its partners formed. Zach Abrams leads the company on an interim basis after co-founding Bridge, the stablecoin company Stripe acquired for $1.1 billion in 2025.
The Open USD partner list includes BlackRock, BNY, Google, Shopify, Coinbase, and Stripe. Several participants already operate stablecoins or provide related infrastructure, while Mastercard has also expanded its stablecoin payment integrations.
Related: Bithumb and Circle Deepen South Korea Stablecoin Rivalry
Stripe has tied its payments business directly to the new token. “Open USD will be the default stablecoin for businesses running on Stripe,” an announcement excerpt said, citing Stripe technology and business president Will Gaybrick.
Circle, Tether, and PayPal did not join the project. Tether’s USDT leads the stablecoin market at about $185 billion, while Circle’s USDC follows with nearly $74 billion. At the same time, USDC has overtaken Tether in corporate transfers. Open USD’s backers include many networks that process those transactions, creating another distribution challenge for Circle.
Still, USDC maintains regulatory standing in the United States and Europe. The stablecoin also retains deep liquidity across cryptocurrency exchanges as Circle develops Arc, tokenized asset services, and the Circle Payments Network.
