Binance takes $100M stake in Circle to boost USDC

Binance, the world's largest cryptocurrency exchange, has invested $100 million in Circle, the company behind the USDC stablecoin. This equity stake comes with a five-year commercial agreement, replacing prior arrangements. Circle issued Binance 1,237,011 Class A common shares at $80.84 each through a private placement on September 17.

The per-share price was below Circle's market value at the time. Under the deal's terms, Binance cannot sell, transfer, pledge, or hedge the shares for up to two years, though this could be lifted if Binance ends the commercial side of the agreement under certain conditions. Binance retains voting rights on the shares throughout the lockup period.

In addition to the equity stake, the new agreement restructures how the companies collaborate on USDC adoption. Circle will provide Binance with a monthly incentive fee based on USDC held through Circle's Modular Smart Contract Wallet. The companies commit to increased promotional activity for USDC across Binance's exchange. The deal also includes early-termination provisions. Circle's stock (NYSE: CRCL) rose to $95.70, up 1.45%, following the news of the investment.