Circle (NYSE:CRCL) says it has expanded its partnership with Binance, one of the world’s largest crypto exchanges. In a post on X, Circle said it has committed to a five-year deal in which Binance will support and promote USDC, Circle’s popular dollar-backed stablecoin.
The deal also includes a $100 million capital investment from Binance in Circle through a private placement purchased at a 5% discount, a significant commitment to the public firm.
USDC holdings are already around $7.1 billion on Binance. USDC is a regulatory-compliant stablecoin poised for growth as jurisdictions worldwide look to enable stablecoin use. Many observers anticipate rising demand for digital assets, especially in markets that struggle with high inflation. Stablecoins offer a fast, easy way to shift value into fiat currency.
At one point, Binance issued its own dollar-based stablecoin BUSD, but the firm has since retired the digital currency due to regulatory challenges. Binance will still support other digital dollars but the investment in Circle makes strategic sense as it is the second most popular stablecoin in the world.
Circle will compensate Binance with an incentive fee for holding USDC in its wallets, giving Binance ongoing financial motivation.
Circle shares were up about 1.4% in early trading.
Binance continues to hold the top global position in trading volume, followed by Coinbase. Most of its trading occurs outside the US, mostly in emerging markets.