OpenUSD's consortium model faces major hurdles, says Ark Invest director

Lorenzo Valente, Director of Crypto Research at Ark Invest, has expressed skepticism about the stablecoin consortium project OpenUSD. He noted that past consortium-based stablecoin projects like Diem and Global Dollar ultimately failed to build strong network effects, while the current market is dominated by Tether (USDT) and Circle (USDC) due to their liquidity and established networks. Valente argued that OpenUSD's joint governance structure is likely to lead to slow decision-making and high collaboration costs, creating governance problems similar to those faced by DAOs. He also pointed out that the project's economic model is unlikely to be sustainable in the long term, considering the costs of building infrastructure, providing incentives, and expanding its market presence. The comments follow an announcement from Governance OpenStandards, a group of over 140 payment and crypto firms including Visa, Stripe, Mastercard, BlackRock, BNY, DBS, Coinbase, OKX, and MetaMask, which revealed plans to launch the OpenUSD stablecoin for global fund transfers.