Binance Invests $100M in Circle to Strengthen Stablecoin Partnership
Binance has invested $100 million in Circle, the company behind the stablecoin USDC. This move extends the partnership between the two firms for five years and involves a private placement of Class A shares.
The agreement consists of two parts: an equity investment where Binance bought 1.24 million Class A shares at $80.84 each, and a supply and marketing deal that replaces earlier arrangements between the two companies.
Circle will pay Binance a monthly incentive fee calculated as a percentage of USDC held through Circle's wallet service. This means that if you hold your USDC in an exchange account, the exchange earns money from the interest on those balances.
This business model is often underestimated by stablecoin users. The issuer keeps the interest on short-dated US government bonds and bank balances backing every USDC issued, while the holder receives only stability, not a return.