Circle pays millions for Binance distribution while its margins collapse

According to CryptoSlate, Circle and Binance have signed a new five-year commercial agreement for USDC distribution, accompanied by a $100 million equity investment from Binance in Circle. Under the deal, Binance purchased 1.237 million Circle Class A shares at $80.84 each with a two-year restriction on selling, pledging, or hedging.

Binance customer USDC balances grew roughly 376% from about $1.5 billion in October 2024 to $7.13 billion, narrowing Tether's lead on the exchange from 14.3-to-1 down to 4.5-to-1. Total circulating USDC grew by roughly 87% over a similar timeframe. The newly announced agreement consolidates and replaces previous arrangements from November 2024 and August 2025, maintaining monthly incentive payments tied to USDC held on the platform and in treasury.

Analysts noted that while the partnership secures a major distribution channel outside Coinbase, Circle's net economics and profit retention remain unclear due to undisclosed fee rates and high distribution costs. Circle reported significant distribution expenses related to Binance throughout the partnership, raising questions about profit margins as the agreement runs through September 2031.