Circle and Binance Join Forces to Grow USDC
Date: 2024-12-12 Author: Oliver Abernathy Categories: BUSINESS
Circle and the world's largest cryptocurrency exchange Binance have announced a joint project aimed at advancing the USDC stablecoin. "We are partnering with a trusted stablecoin operator to accelerate the next phase of crypto adoption," said Circle co-founder and CEO Jeremy Allaire.
As part of the partnership, Binance will expand access to USDC across its platforms, including integrating the asset into corporate treasury. Circle, in turn, will provide the exchange with technology solutions, liquidity, and other tools to streamline operations.
Allaire emphasized that the companies intend to develop joint products and form new alliances that promote the use of stablecoins in everyday financial processes and global trade.
The backstory of the interaction between Circle and Binance is connected with the events of 2023, when the New York State Department of Financial Services (NYDFS) banned Paxos from issuing the BUSD stablecoin issued for Binance. The US Securities and Exchange Commission (SEC) also filed claims against the asset, considering it an investment contract. Circle supported Binance in the dispute over the status of BUSD, and the investigation was closed in the summer of 2024.
Earlier, the media reported that Circle drew the attention of regulators to the problems of managing BUSD reserves. Shortcomings in the asset's collateral were also noted by other experts.
At the same time, in 2023, Binance facilitated the launch of a new stablecoin FDUSD from the Hong Kong company First Digital Labs. Currently, FDUSD has a capitalization of $1.74 billion, while USDC has a capitalization of $40.8 billion. The segment leader is Tether's USDT with a market value of $138.7 billion.
The total market value of stablecoins recently exceeded $200 billion. Bernstein analysts predict that in five years this figure will reach $2.8 trillion, which reflects the rapid development of the sector.
