Circle · Tether · Coinbase · CryptoSlate
Circle pays millions for Binance distribution while its margins collapse
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Circle is doubling down on Binance after USD Coin (USDC) stablecoin customer balances on the exchange nearly quintupled since their first agreement.
Key facts
- By Sept. 1 this year, customer USDT balances had risen to $32.3 billion, while USDC reached about $7.1 billion
- Binance customers held $21.4 billion of USDT in the Oct. 1, 2024 reserve snapshot, compared with $1.5 billion of USDC
- An additional $1 billion of USDC at a 3.5% reserve return would produce about $35 million in gross annual reserve income
- With Binance customers now holding more than $7 billion of USDC, those disclosures could show how much Circle is paying to preserve a channel that has grown from less than 4% of global USDC
Summary
01 Circle and Binance signed a five-year USDC deal as Binance invested $100 million in the stablecoin issuer. 02 Binance customer USDC balances nearly quintupled to $7.13 billion, narrowing Tether’s exchange lead. 03 Undisclosed incentives leave one question: how much profit does Circle keep after paying Binance for distribution? On Sept. 22, the companies announced a new five-year commercial agreement alongside Binance’s $100 million equity investment in Circle, extending a relationship that has turned the world’s largest crypto exchange into one of USDC’s most important distribution channels.