“Large groups of large companies coordinate poorly, have misaligned incentives, slow things down, and rarely create the space needed for true sustainable innovation,” he writes.
Testing the consortium model
This skepticism is shared by Lorenzo Valente, director of digital assets research at ARK Invest, who noted that crypto has seen several consortium-backed stablecoin initiatives over the years, including Meta’s Diem project and the Paxos-led Global Dollar Network.
“Every year we build our consortium-style initiative around a stablecoin,” Valente wrote in an article
He said the Open Standard’s biggest challenge could be coordinating more than 140 participants with competing interests.
“A consortium made up of hundreds of competitors has no precedent for operating,” he said. “The pace of decision-making among competitors is going to be glacial.”
Valente compared the model to decentralized autonomous organizations, or DAOs, whose governance structures often struggled to make timely decisions.
“‘Belonging to everyone’ almost always means being accountable to no one,” he said. “I would bet on the two operators who can ship unilaterally without resorting to 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 faces regulatory pressure. Circle and Tether, he pointed out, have spent years building regulatory infrastructure and global licensing, while a consortium might have a harder time staying aligned if conditions become more difficult.
