Why the Binance and Circle Deal Strengthens USDC in Competition with Tether

According to analysts, the Binance and Circle deal provides the USDC issuer with a more powerful distribution channel in emerging markets and global crypto trading, but it will be difficult to quickly displace Tether due to the deep liquidity of USDT and user habits.

Jeremy Allaire, co-founder, chairman of the board, and CEO of Circle.

Binance invested $100 million in Circle's shares and entered into a new five-year commercial agreement with the company. This agreement provides for the promotion and integration of USDC on the Binance platform, one of the largest cryptocurrency exchanges in the world. For Binance, this means a direct interest in the growth of Circle, and for Circle, it means access to a broader user base.

Analysts believe that the partnership is particularly important for markets where Tether's USDT has long held strong positions. They estimate that distribution through Binance could become one of the main factors accelerating USDC's growth.

• Binance's $100 million stake and five-year partnership provide Circle with a significant channel for promoting USDC in markets dominated by USDT.
• Following the first agreement between the companies in 2024, USDC trading activity on Binance sharply increased, according to Kaiko data.
• Despite this, Tether maintains an advantage due to local liquidity, depth of trading pairs, and established user habits.

"This optimizes the relationships and further aligns the interests of Binance and Circle, reflecting the Circle-Coinbase share distribution model," said Clear Street analyst Owen Lau.

Binance has already become a key platform for trading USDC

The first partnership between Binance and Circle, announced in December 2024, has already significantly changed USDC's position on the exchange. At the time of the partnership launch, Binance supported 140 spot markets quoting in USDC. Now, according to Kaiko, their number has increased to 329.

For comparison: the journey from 39 such markets in 2021 to 140 by the end of 2024 took much longer. After the start of cooperation with Circle, the pace of expansion has noticeably increased.

The monthly trading volume of USDC on Binance has also roughly doubled. Previously, it ranged from $20 billion to $40 billion, but now it consistently exceeds $80 billion.

"Throughout 2026, Binance has consistently held the largest share of the USDC spot trading market, processing between $5 million and $10 billion daily. This is about 10 to 20 times more than most other platforms, where volumes typically do not exceed $0.5 billion," said Kaiko's head of research Anastasia Melachrinou.

According to Kaiko, other major exchanges have generally remained within their previous trading ranges for USDC. This indicates that a significant portion of the growth has come specifically from Binance.

"As Binance accelerates the expansion of USDC into new markets, its dominant position is likely to strengthen," noted Melachrinou.

Competition with Tether is intensifying, but USDT's leadership remains strong

The market capitalization of USDC is approximately $74 billion. It is the second-largest dollar stablecoin after Tether's USDT, which has a market capitalization estimated at around $140 billion.

"Both sides have a clear incentive to expand USDC through the user base and infrastructure of Binance," said Gravity Team co-founder and CEO Martins Benkitis.

Circle is developing not only the issuance of stablecoins. The Circle Payments Network is designed to connect financial organizations and facilitate payments in stablecoins. Additionally, the recently announced acquisition of Singapore's Tazapay for $400 million is expected to provide Circle with local banking connections and payment infrastructure in emerging markets.

At the same time, competition in the stablecoin market goes beyond the rivalry between Circle and Tether. Banks and payment companies, including Visa, Mastercard, and Stripe, are increasingly developing areas related to payments and stablecoin infrastructure.

Circle also maintains close commercial ties with Coinbase, which distributes USDC and participates in its economy. Owen Lau emphasized that the agreement with Binance does not give Circle additional influence over Coinbase, especially since the partnership with Coinbase was recently renewed.

The new agreement with Binance may bring USDC to a wider audience, but Tether's network, built over years in trading and payments, limits the speed of potential market share redistribution.

"This creates additional pressure on USDT, especially in global and emerging markets where it has been firmly established for many years. But distribution alone is not enough to change the picture instantly. USDT has deep trading pairs, local liquidity, and, importantly, users are already accustomed to using it," said Benkitis.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.