(Bloomberg) -- Circle Internet Financial Ltd., the issuer of the stablecoin USDC, and the crypto exchange Binance said they’re partnering to expand the use of the token on the trading platform as part of a plan to accelerate growth.
Binance will list more crypto trading pairs denominated in USDC, and offer special promotions tied to USDC-related trading. Binance also plans to hold USDC for its own corporate treasury, according to a statement. A spokesperson for Binance declined to comment about how much USDC the firm will own, adding that they aim to add the stablecoin “over time.”
The expanded partnership comes as Circle’s main competitor, Tether, increases the dominant market share of its USDT token during the current crypto rally. At the same time, Binance is seeking to firm up its market leading position after reaching a $4 billion settlement last year with the US over a litany of allegations linked to violations of anti-money laundering and sanctions law.
“Binance has undergone a deep transformation of its business, and over time, we mutually agreed that it made sense to pair one of the world’s most trusted and regulated stablecoins, USDC, with the world’s largest cryptocurrency exchange to prioritize the safety and security of their customers’ assets as the company focuses on improving its regulatory scorecard,” said Kash Razzaghi, Circle’s chief business officer.
Stablecoins are digital assets designed to hold a steady value, in contrast to the price volatility seen in Bitcoin and other cryptocurrencies. They are usually pegged to another currency, most commonly the dollar. They are also are being increasingly used for cross-boarder transactions between non-crypto companies.
Interest in the sector has increased in the past year because stablecoins offer cheaper and faster solutions to some regular banking payment rails. The overall stablecoin market has swollen to more than $204 billion, according to tracker CoinGecko. USDT has about $139 billion in circulation, while Circle’s USDC has about $41 billion.
Razzaghi said Circle’s focus on compliance and transparency will position the firm “incredibly well competitively” as the market moves into “a world where stablecoins are regulated in every major financial center.”
Notably, Binance has been a long-time competitor of Coinbase Global Inc., which has a close relationship with Circle. USDC was launched through a joint venture between Coinbase and Circle in 2018. Circle also has a revenue-sharing agreement where Coinbase takes part of the interest income from USDC reserves based on the amount of the stablecoin that’s held on Coinbase. Razzaghi declined to comment on whether Circle has similar revenue-sharing arrangement with Binance.
Binance’s spokesperson said the firm continues to “work with multiple stablecoin issuers or creators,” and their decisions are based on users’ demand.
(Updates the comment from Circle in the seventh paragraph.)
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