The Stablecoin Alliance: Binance Lock Itself to Circle for Five Years

Binance buys $100 million equity stake in Circle through a private placement, acquiring 1,237,011 Class A shares at $80.84 of Circle shares at a discount to the previous market value. The deal, signed last month on 17 th September, will see Binance receive monthly incentive payments based on the amount of funds held by Circle’s Modular Smart Contract Wallet users for the next five years. The company will also distribute USDC tokens across its business, with the agreement replacing older partnerships made in November 2024 and August 2025.

According to the terms, Binance cannot sell, transfer, pledge or hedge these assets during a two-year period, with no voting rights attached to the shares, but the coins can be redeemed early if particular conditions are met. Both parties have the right to terminate the deal, while co-CEO Richard Teng stated that the partnership creates greater utility for “a stable, reliable digital dollar,” , whereas co-founder Jeremy Allaire highlighted the importance of USDC for emerging markets.

The fact that Binance buys Circle’s shares at a discount to the previous market value may signify that the investment was negotiated in a highly competitive environment. One of the most interesting parts of the deal is that Binance receives monthly payments based on the amount of USDC stored in wallets rather than first-layer trading volumes. This dynamic is particularly important considering that USDC is currently the second largest stablecoin in terms of TVL and the competition between it and USDT is becoming more interesting at the exchange level.