Circle gains Binance backing in USDC-Tether race

Circle has secured a $100 million investment from Binance and a five-year commercial agreement designed to increase USDC distribution, giving the stablecoin issuer another channel as it competes with Tether.

Circle said on Sept. 22 that Binance had purchased $100 million of its Class A common stock and renewed their USDC partnership for five years, with a focus on distribution in emerging markets.

The agreement builds on a relationship that began in late 2024. Analysts interviewed by CoinDesk said Binance could help Circle place USDC in front of more users, particularly in markets where dollar stablecoins play a large role in crypto trading and payments.

Kaiko data cited by CoinDesk showed the number of USDC-quoted spot markets on Binance rising from 140 when the original partnership began to 329. Monthly USDC trading volume on the exchange moved from roughly $20 billion-$40 billion before the deal to more than $80 billion in recent months.

Circle and Binance deepen their financial ties

The new arrangement goes further than distributing USDC because Binance now owns Circle stock. Circle’s SEC filing shows that Binance bought 1,237,011 Class A shares at $80.84 each. The private placement generated $100 million for Circle and closed on Sept. 17.

The purchase price represented a discount to Circle’s market price before the transaction closed. Binance retains voting rights attached to the shares but agreed to restrictions on selling, transferring, pledging or hedging them for up to two years, subject to specified exceptions.

Under the commercial agreement, Circle will pay Binance a monthly incentive calculated as a percentage of qualifying USDC held through Circle’s Modular Smart Contract Wallet infrastructure service. Binance agreed to perform activities promoting USDC on its platform.

Either company can terminate the agreement before the five-year period expires when specified conditions occur. The arrangement replaces agreements signed in November 2024 and August 2025.

As crypto.newsreported on the Binance investment, the share purchase and renewed commercial arrangement tie Binance’s financial interest more closely to USDC distribution.

Clear Street analyst Owen Lau told CoinDesk that the structure further aligns Binance and Circle, drawing a comparison with Circle’s existing relationship with Coinbase.

Binance has become a major USDC trading venue

Trading data suggests Binance was already becoming a larger source of USDC activity before the new agreement was signed.

According to Kaiko data cited by CoinDesk, Binance handled roughly $5 billion-$10 billion of USDC spot trading per day during 2026. Anastasia Melachrinos, Kaiko’s head of research, said that was around 10 to 20 times the activity recorded on many competing trading venues.

USDC trading pairs on Binance have increased sharply since the companies began working together. The platform had 39 USDC spot markets in 2021 and 140 by late 2024, before reaching 329 under the partnership.

The expansion does not mean every USDC pair remains permanently listed. Binance periodically removes individual markets when liquidity or volume no longer meets its requirements. Crypto.news reported earlier in September that BREV/USDC, COOKIE/USDC, LA/USDC and QNT/USDC were scheduled for removal following one such review.

Circle has been working with other exchanges at the same time. Its expanded partnership with OKX covers USDC trading in spot, margin and futures markets.

Circle’s expanded OKX partnership earlier this month. Eligible traders gained more access to USDC-denominated markets as Circle sought distribution beyond a single exchange.

USDC remains well behind Tether by market value

The Binance agreement comes while USDC remains the second-largest dollar stablecoin behind Tether’s USDT.

CoinGecko recorded USDC’s market capitalization at roughly $75.3 billion on Sept. 23, up from $73.6 billion on Sept. 17.

Tether remained considerably larger. CoinGecko data placed USDT’s market value at approximately $183.8 billion on Sept. 26, with daily trading volume close to $69 billion. Its market capitalization had stayed near $183 billion throughout most of September.

Gravity Team CEO Martins Benkitis told CoinDesk that Binance gives Circle an incentive and distribution route to increase USDC usage. He cautioned that USDT’s existing trading pairs, local liquidity and established user behavior make rapid changes in market share difficult.

The difference extends beyond token supply. USDT has long-established liquidity in international crypto markets and remains heavily used as a quote asset for trading. Analysts interviewed by CoinDesk said Circle’s Binance partnership could increase competitive pressure without immediately replacing those networks.

Circle has meanwhile expanded USDC’s presence through its own infrastructure. On Sept. 16, the company launched the mainnet of Arc, a blockchain using USDC for transaction fees.

The Arc launch, the network opened with institutional validators including BlackRock, Visa, Mastercard, DTCC and Standard Chartered.

Circle is building payment rails beyond exchanges

Circle’s competition for stablecoin usage now extends into payment infrastructure and cross-border settlement.

On Sept. 8, Circle announced an agreement to acquire Tazapay, a Singapore-based cross-border payment company. Circle said the transaction would add relationships with more than 60 banks and fintech companies and payout capabilities covering more than 100 markets.

The acquisition is expected to close in 2027 after regulatory approvals, including consent from the Monetary Authority of Singapore. An SEC filing shows the transaction is structured as a share purchase and remains subject to closing conditions.

Tazapay transaction is valued at $400 million in stock. Tazapay processes more than $25 billion in annualized payment volume, while stablecoins account for roughly 60% of its transaction activity, according to information released around the deal.

Circle Payments Network forms another part of the company’s payments strategy. The network connects financial institutions and payment providers using regulated stablecoins for cross-border settlement.

Binance gives Circle a different distribution route through trading accounts and users in international markets. Binance co-CEO Richard Teng said the company’s $100 million investment and five-year commitment represented what he called “long-duration conviction” in Circle and USDC.

Circle CEO Jeremy Allaire described Binance as one of the largest platforms for dollar stablecoin use and said the renewed partnership would extend USDC availability through its global user base.