Invest13 publishers3 min readPublished
Tether added nearly twice as many dollars as USDC on Binance since Circle started paying
Binance bought $100 million of Circle stock and signed to promote USDC through September 2031. Customer USDC balances on the exchange are up fivefold at $7.13 billion; the USDT balance is up $10.9 billion.
The Investor · Invest desk
What happened
- Circle and Binance announced a five-year USDC commercial agreement on Sept. 22, alongside a $100 million equity investment by the exchange in the stablecoin issuer.
- Binance took 1.237 million Class A shares at $80.84 each, a 5% discount to the Sept. 17 close, with a two-year restriction on selling, pledging or hedging the position.
- The contract, which runs through September 2031, consolidates and replaces the arrangements Circle signed with Binance in November 2024 and August 2025.
- Binance's Sept. 1 proof-of-reserves snapshot put customer USDC balances at about $7.13 billion, up roughly 376% from about $1.5 billion on Oct. 1, 2024.
- Customer USDT balances on Binance rose about 51% over the same period, narrowing the USDT-to-USDC ratio on the exchange from roughly 14.3 to 1 to about 4.5 to 1.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost Each percentage point of annualised pass-through on $7.13 billion of balances costs Circle $71.3 million a year, about $356 million across the five-year term, against a single $100 million stock sale.
- constraint Circle has not published the fee percentage or the early-termination thresholds, so an outside investor cannot calculate the yield Circle keeps on its fastest-growing distribution channel.
- exposure Binance's route out of the lockup runs through the commercial deal: ending it under certain conditions releases the shares before two years, so Circle's distribution contract is what keeps the stake frozen.
The two proof-of-reserves snapshots that bracket the paid partnership put customer USDT on Binance at $21.4 billion and then $32.3 billion [15][16]. Measured against the USDC balances in the same snapshots, the difference between the two tokens widened from $19.9 billion to $25.2 billion [1][2][3]. USDT added $10.9 billion on the exchange over those eleven months, and USDC added $5.6 billion [4].
Globally the two sit closer together. Tether's USDT has a market capitalisation of roughly $183 billion against nearly $76 billion for USDC [20], about 2.4 to 1 [7]. So even after quintupling its balances there, USDC is thinner on Binance than it is in the stablecoin market as a whole [7]. Circulating USDC went from $39.7 billion in late November 2024 to roughly $74.4 billion, up about 87% [18]; the Binance increase accounts for about 16% of that net growth [6].
What Circle pays for the channel is partly on the record, in the deal it has now torn up. The November 2024 agreement carried a $60.25 million upfront fee plus monthly incentives based on USDC held on the exchange and in Binance's treasury [7], running at an annualised mid-double-digit to high-double-digit percentage of a fixed rate reset quarterly at a discount to three-month SOFR [8]. Binance agreed, subject to exceptions, to keep $3 billion of USDC in its treasury, with the treasury incentive requiring at least $1.5 billion to stay put [9]. The upfront fee on its own came to about 4% of the $1.5 billion of customer USDC then on the exchange [9].
The replacement pays a monthly fee on a percentage of USDC held through Circle's Modular Smart Contract Wallet service [11], which is a narrower base than the customer balance a reserve snapshot counts [14].
Binance paid $80.84 a share at a 5% discount, implying a reference close of about $85.09 on Sept. 17 [3][10]. CRCL closed at $94.49 on Sept. 21, valuing the 1,237,011 shares at roughly $116.9 million and the paper gain at about $16.9 million, none of it realisable inside the lockup [21]. The stock is down about 34% over twelve months [22]. Binance co-CEO Richard Teng said the $100 million reflects the exchange's "long-duration conviction" in Circle, according to Fortune [23].
In my view Circle is paying a recurring fee to be the second token in a venue where the dollar gap has grown, and the equity cheque does not change that direction. The counter sits in Circle's own filings: USDC was 5% of stablecoins on Binance on July 1, 2024, 10% by January and 22% by July 1, 2025 [19], and a mix moving that fast inverts the dollar gap without any further payment. Cryptopolitan reports European regulatory pressure has made things harder for USDT [25], and the new agreement is aimed at emerging markets [26], where Jeremy Allaire wrote on X that the partnership "will accelerate global and emerging market preference and adoption of USDC" [24]. The test is the dollar difference, not the ratio: if the next snapshots show USDT balances on Binance growing more slowly than USDC's in dollars, the payments are buying displacement and I am wrong.
What to watch
- Whether Circle's next filings disclose the percentage used in the new monthly fee, or the size of the Modular Smart Contract Wallet balances the fee is charged on.
- Whether the $3 billion Binance treasury commitment from the November 2024 deal survives in the replacement contract.
- Whether Binance terminates the commercial arrangement, which would end the share lockup before the two-year mark.