Circle Spends Millions to Secure USDC Distribution on Binance

Circle and Binance announced a five-year commercial agreement on Sept. 22 that included a $100 million Binance purchase of Circle Class A shares and a multi-year distribution deal for USD Coin (USDC). The contract extends their relationship through September 2031 and consolidates earlier agreements from November 2024 and August 2025.

Under the agreement, Binance bought 1.237 million Class A shares at $80.84 each, a roughly 5% discount to Circle’s Sept. 17 closing price. The shares carry a two-year restriction on selling, pledging or hedging. The deal preserves a structure in which Circle pays monthly incentives linked to USDC held on Binance and in Binance’s treasury; Circle has not disclosed the new fee rate or any minimum balance commitments.

Binance customer holdings of USDC rose sharply during the partnership. Customers held about $1.5 billion of USDC on Oct. 1, 2024; by Sept. 1, 2025, Binance’s proof-of-reserves snapshot showed roughly $7.13 billion, an increase of about 376%. Over the same interval, global USDC in circulation increased from roughly $39.7 billion to about $74.4 billion, up about 87%. Binance’s share of global USDC moved from under 4% at the start of the partnership to nearly 10%.

The shift narrowed Tether’s lead on Binance. On Oct. 1, 2024, Binance customers held $21.4 billion in USDT versus $1.5 billion in USDC, a ratio of about 14.3-to-1. By Sept. 1, 2025, USDT balances were $32.3 billion while USDC reached about $7.1 billion, a ratio closer to 4.5-to-1. Tether remained the largest dollar token on the platform.

Circle’s prior arrangements with Binance included a $60.25 million upfront fee under the November 2024 agreement and monthly incentive payments tied to balances and treasury holdings. Those payments were set as a percentage of a fixed rate linked to three-month SOFR and reset quarterly; earlier terms could generate mid- to high-double-digit annualized rates for Binance. An August 2025 expansion covering USDC held through Binance’s Modular Smart Contract Wallet added additional incentives at similar rates.

The new five-year contract continues a monthly incentive tied to wallet balances but omits disclosure of the fee rate and any minimum treasury commitments. Circle’s filings show distribution costs tied to Binance rose as the relationship expanded.

Circle reported about $668 million of reserve income in the second quarter and roughly $410 million of distribution and transaction costs, equal to about 61% of reserve income. Circle’s filings state distribution costs specifically related to Binance increased by $152.1 million in 2025.

Analysts at Clear Street estimate that an additional $1 billion of USDC earning a 3.5% reserve return would generate about $35 million of gross annual reserve income. If Binance receives a high-double-digit share of that income under earlier-style terms, Circle might retain roughly $4 million to $7 million of the $35 million.

Circle CEO Jeremy Allaire wrote on X that the partnership will “accelerate global and emerging market preference and adoption of USDC” and help extend access to onchain finance. Binance CEO Richard Teng described the $100 million investment as a commitment to “regulation, transparency and delivery” and said the partnership will help put a “stable, reliable digital dollar within reach of anyone with a phone.”

The agreement makes Binance both a major distribution channel for USDC and a minority shareholder in Circle. The companies and analysts will be watching future quarterly disclosures for details on Binance USDC balances and Circle’s non-Coinbase distribution expenses to clarify the economics of the arrangement.