Galaxy's Research Head Alex Thorn Casts Doubt On Open USD Even As His Firm Signs On As A Member

• Galaxy Digital's Alex Thorn cast doubt on Open USD's ability to gain meaningful market share, arguing that consortium-backed stablecoins have historically struggled to scale.
• Thorn described the stablecoin market as a "60-30-10" structure, with dominant players like Tether's USDT and Circle's USDC controlling the vast majority of supply.
• He noted that USDG, another consortium-backed project involving Galaxy, is the only such stablecoin currently ranked among the market's top 10 by size.

Galaxy Digital (GLXY) Head of Firmwide Research Alex Thorn expressed skepticism about the newly launched Open USD (OUSD) consortium stablecoin on Friday, arguing that consortium-based coins have struggled to gain scale even as his own firm has signed on as a member.

Speaking on Galaxy's podcast, Thorn said the stablecoin market tends to resemble a "60-30-10" structure, in which one player dominates, a second holds a large secondary share, and a long tail of competitors splits the rest. 

He put Tether's USDT at about $180 billion and Circle's USD Coin (USDC) second at roughly $75 billion, with the next-largest, MakerDAO's (MKR) Sky USD, an order of magnitude lower at about $7 billion. The only consortium-backed stablecoin in the top 10, Thorn said, is USDG at number 10, a coin Galaxy is also involved in.

Thorn acknowledged the apparent tension in his position, noting that Galaxy is a member of the Open USD coalition. Citing a point made by Circle (CRCL) CEO Jeremy Allaire, he said the fact that no consortium stablecoin has worked at scale before does not mean the new effort will fail to gain adoption, according to the podcast.

Circle CEO Reveals His Stance On OUSD

On Wednesday, Allaire questioned the consortium model behind the newly formed Open USD, saying those structures rarely scale or produce lasting innovation. The track record of consortium products on scale and product agility is “absolutely dismal," he said, citing large groups of large companies that collaborate poorly, move slowly and hold back durable innovation. 

Circle tried a similar approach early on with USDC and "ran into endless challenges and complexity" even with a small group, Allaire noted. But smaller, tighter strategic partnerships that can move independently will almost always out-compete large consortiums, he said. And member firms often lend their logos to such efforts, while their operating units ultimately partner with the market leader.

The Consortium Precedent

Open USD was launched in late June by an independent entity called Open Standard and is backed by a consortium of more than 140 companies, including Visa (V), Mastercard (MA), Stripe, BlackRock (BLK), and Coinbase (COIN). 

The project was designed to return nearly all the interest earned on its reserves to partner companies rather than retaining it as issuer income, a direct challenge to the economics that have made Circle and Tether profitable. 

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