Binance and Circle announced a strategic partnership to promote the USDC stablecoin. This move aims to strengthen the position of the stablecoin in the global financial system.
Strategic Partnership
Details about revenue sharing remain undisclosed, but sources told Fortune that Binance will not acquire an equity stake in Circle. The partnership aims to expand global adoption of USDC. Binance will incorporate USDC into its full suite of products and services, offering its 240 million users access to the stablecoin for trading, saving, and payment applications. As part of the agreement, Binance will adopt USDC as a key component of its corporate treasury, while Circle will provide necessary technology, liquidity, and tools to enable user access to USDC and strengthen global financial relationships.
Battle for Dominance
Currently, the stablecoin market is led by Tether with a $138 billion market cap, significantly ahead of USDC at $40 billion. Despite allegations of questionable accounting practices and links to illicit activities, Tether remains a key player. Binance was previously a major competitor with its BUSD reaching a $23 billion market cap, but regulatory pressure forced it to wind down operations. Circle criticized Binance and Tether for lack of compliance. The recent partnership marks a shift in their relationship. After resolving regulatory issues, Binance is committed to an oversight regime that aligns it with Circle's regulated and trusted USDC.
New Market Moves
Meanwhile, other competitors are making moves to challenge the leading stablecoin issuer. Robinhood, Galaxy Digital, Kraken, and Paxos have recently formed a consortium supporting the latest stablecoin offering (USDG) issued by Paxos. In a November 5 statement, the company announced that the new 'Global Dollar Network' was designed to accelerate the global adoption and use of these assets worldwide.
The partnership between Binance and Circle represents a significant step in the stablecoin market, creating new opportunities for competition against the market leader, Tether.
