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Binance buys $100 million Circle stake in five-year USDC deal

Binance buys $100 million Circle stake in five-year USDC deal

Money Moves

Crypto exchange becomes part-owner of the second-largest stablecoin issuer

Yesterday: Binance and Circle announce equity investment publicly

Overview

Updated Yesterday

Binance bought $100 million of Circle stock on Sept. 17, becoming a part-owner of the company behind USD Coin (USDC), the second-largest stablecoin. The equity purchase came with a five-year commercial agreement that pays Binance a monthly fee tied to USDC holdings it helps grow.

The deal caps a feud that peaked in late 2022, when Binance dropped USDC trading and converted customer balances into its own stablecoin, which regulators later killed. With the stablecoin market above $300 billion, the world's largest exchange now profits from USDC growth rather than fighting it.

Why it matters

The largest crypto exchange now earns fees on USDC growth, tying its incentives to Circle and shifting the stablecoin market's center of gravity.

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Key Indicators

$100M
Binance investment in Circle
Private placement of 1.24 million Class A shares at $80.84 each.
1.24M
Shares purchased by Binance
Purchase price reflected a 5 percent discount to market before closing.
5 years
Commercial agreement term
Circles pays Binance a monthly incentive fee tied to USDC held through its smart contract wallet service.
$76B
USDC market cap
Second-largest stablecoin after Tether's USDT, which stands near $183 billion.
$306B
Total stablecoin market value
Sector grew sharply after the US passed the GENIUS Act in 2025, creating a federal stablecoin framework.

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People Involved

Organizations Involved

Timeline

December 2022 September 2026

6 events Latest: Yesterday
Tap a bar to jump to that date
  1. Binance and Circle announce equity investment publicly

    Latest Announcement

    Circle confirmed the $100M Binance investment and five-year commercial deal focused on USDC adoption in emerging markets.

  2. Binance buys $100M Circle stake, signs five-year USDC deal

    Investment

    Binance acquired 1,237,011 Circle shares at $80.84 each, a 5 percent discount, alongside a five-year promotional agreement.

  3. Partnership renewed ahead of the Genius Act's market effects

    Partnership

    Circle and Binance signed an updated agreement in August 2025, expanding the prior arrangement.

  4. Binance and Circle sign first partnership agreement

    Partnership

    The two companies entered their initial commercial agreement covering USDC promotion, replacing the rivalry.

  5. New York regulator halts BUSD minting

    Regulation

    The New York Department of Financial Services ordered Paxos to stop minting BUSD, effectively killing Binance's house stablecoin.

  6. Binance ends USDC support, pushes BUSD

    Strategy

    Binance cut USDC trading and converted customer balances to BUSD, its own stablecoin minted by Paxos.

Scenarios

1

USDC outgrows Tether over the next year

Possible Resolves by Sep 17, 2027

Discussed by: Forkast and Fortune analysis of the incentive structure

The deal gives Binance a direct financial reason to push USDC in emerging markets where Tether dominates. Monthly incentive fees tied to USDC held through Circle's wallet service, plus a formal promotional mandate, could move real volume. If so, USDC's growth rate should exceed USDT's over the next year.

2

Regulators open inquiry into exchange-stablecoin alignment

Unlikely Resolves by Sep 17, 2027

Discussed by: Cryptonomist analysis of concentration risks

An exchange owning equity in a stablecoin issuer while earning promotional fees raises questions about market concentration and integrity. US or EU regulators could examine whether the arrangement creates unfair advantages or systemic risks, especially given Binance's regulatory history.

3

Agreement modified or terminated early

Unlikely Resolves by Sep 17, 2028

Discussed by: Termination clauses in the 8-K filing

The commercial agreement lets either side terminate early under specified conditions. If USDC adoption stalls, incentive fees underperform, or leadership changes, the terms could be renegotiated. Circle's public filings would reveal any such change.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2018

Coinbase co-founds USDC with Circle (2018)

Circle and Coinbase launched the Centre Consortium to issue USDC, splitting reserve revenue. Coinbase invested in Circle and became a major shareholder, giving the exchange a direct financial stake in USDC's success.

Then

USDC rose to become the second-largest stablecoin, used primarily on Coinbase's platform.

Now

Coinbase's equity stake meant exchange and issuer shared a financial incentive in USDC growth, a model now repeated.

Why this matters now

Binance's equity stake replicates Coinbase's playbook, but on a larger exchange with a global user base in emerging markets.

December 2022 - February 2023

Binance's BUSD push fails (2022-2023)

Binance cut USDC trading in December 2022 and converted customer balances to BUSD, a stablecoin minted by Paxos. In February 2023, the New York Department of Financial Services ordered Paxos to stop minting BUSD.

Then

BUSD was wound down and Binance lost its house stablecoin.

Now

The failure pushed Binance back toward USDC, ending a feud that peaked over its own token.

Why this matters now

Explains why Binance pivoted from fighting Circle to paying to promote USDC: its own stablecoin attempt was shut down by regulators.

Sources

(12)