Binance Invests $100 Million in USD Coin Issuer Circle
Circle, the stablecoin issuer behind USD Coin (USDC), has received a significant investment from Binance, one of the largest cryptocurrency exchanges. The deal, valued at $100 million, involves Circle issuing and selling 1.24 million shares to Binance at $80.84 each.
The agreement also includes a five-year commercial deal that requires Circle to pay Binance a monthly fee tied to USDC promotion and activity on the platform. This means that Circle will incentivize Binance to promote USDC, essentially paying for distribution.
For Circle, the payoff comes if this push lifts USDC's circulating supply, which would increase the dollars backing those coins in reserves that can earn interest. However, the risk is that incentive payments become a lasting drag on the company's finances if supply growth doesn't stick.