Binance and Circle,Once Bitter Rivals, Join Hands To Boost Global USDC Adoption

Circle and Binance have revealed their strategic partnership during Abu Dhabi Finance Week to promote USDC, a stablecoin jointly owned by Circle and Coinbase.

The collaboration occurs as stablecoins become increasingly popular in mainstream finance and rivals aim to displace Tether as the market leader.

Strategic partnership

As part of the partnership, Binance will integrate Circle’s USD Coin (USDC) more extensively across its platform. According to a Binance spokesperson:

“Users will gain more opportunities to use USDC, including expanded trading pairs, exclusive promotions, and enhanced offerings on Binance.”

The spokesperson highlighted the critical role stablecoins like USDC play in the financial ecosystem, citing their utility in hedging inflation, enabling cost-effective remittances, and facilitating cryptocurrency transactions. Binance has also committed to adopting USDC within its corporate treasury operations.

Circle, in turn, will provide Binance with liquidity solutions and technological support, while fostering relationships with global financial and commercial entities.

Coinbase's Shan Aggarwal stated

"USDC circulation will continue to grow, helping to increase economic freedom around the world and lead the industry forward on foundation of transparency and trust."

Circle CEO Jeremy Allaire similarly have also showed great optimism for the partnerships, highlighted that this partnership could be the stepping stone to help Binance realise its ambition to make USDC a household name on its platform.

Dethroning Tether's dominance

Tether, with its substantial $138 billion market cap, currently dominates the stablecoin market, far outpacing USDC at $40 billion.

Despite ongoing controversies surrounding its accounting practices and alleged ties to illicit activities, Tether remains a significant player in the industry.

Binance, once a formidable competitor with its BUSD stablecoin reaching a $23 billion market cap, was forced to curtail operations due to regulatory pressures in 2023.

At the time, Circle, a key player in the USDC stablecoin, criticized both Binance and Tether for their lack of regulatory compliance.

However, a recent partnership marks a surprising turn of events. After resolving regulatory issues with the U.S. Justice Department, Binance has committed to implementing a rigorous oversight regime, enabling it to align with Circle’s regulated and trusted USDC.

While this collaboration could potentially disrupt Tether’s dominance, revenue-sharing arrangements between the three companies may complicate matters.

Meanwhile, other players are vying for a larger share of the stablecoin market. A consortium comprising Robinhood, Galaxy Digital, Kraken, and Paxos has recently launched USDG, a new stablecoin issued by Paxos.

The companies behind the “Global Dollar Network” aim to accelerate the global adoption and utilization of these digital assets.