“Big conglomerates of big companies poorly coordinate, create the wrong incentives, slow things down and rarely make room for real sustainable innovation,” he wrote.
Testing for the consortium model
This skepticism is shared by Lorenzo Valente, director of digital asset research at ARK Invest, who noted that crypto has seen several consortium-backed stablecoin initiatives over the past few years, including Meta’s Diem project and the Paxos-led Global Dollar Network.
“Every year we get our consortium-style initiative around a stablecoin,” Valente wrote in an X post. “While the group of players here is clearly powerful, I am highly skeptical that any of these initiatives can scale.”
He said the biggest challenge for open standards may be coordinating more than 140 participants with competing interests.
“The consortium of hundreds of rivals has no precedent for working,” he said. “Decision making among competitors is going to be slow.”
Valente compared the model to decentralized autonomous organizations, or DAOs, whose governance structures often struggled to make timely decisions.
“‘Owned by everyone’ almost always means being accountable to no one,” he said. “I’d bet on the two operators who can do unilateral shipping over a committee that has to ask hundreds of competitors for permission.”
He also questioned whether big banks, payment networks and technology companies would remain committed if the project faced regulatory pressure. Circle and Tether have spent years building global regulatory infrastructure and licensing, he said, while it may be harder for a consortium to stay in alliance if conditions become more challenging.