Binance buys $100 million stake in Circle, expands partnership

Sept 22 : Circle said on Tuesday that Binance has purchased a $100 million stake in the stablecoin issuer, deepening the crypto exchange's ties with the company behind USDC, a major dollar-pegged token.

Circle shares were last up nearly 2 per cent in premarket trading.

Here are more details:

• Circle disclosed in a regulatory filing that on September 17, it issued and sold roughly 1.24 million shares to Binance at a purchase price of $80.84 per share.

• Circle is the issuer of USDC, a dollar-pegged stablecoin with a market capitalization of nearly $75 billion, according to CoinMarketCap data.

• Stablecoins are digital tokens designed to maintain a stable value, typically pegged to currencies such as the US dollar. They have grown popular as a faster way to move money across crypto markets and are increasingly being used for payments.

• The expanded commercial arrangement has a five-year term, although either Circle or Binance can terminate it early under certain specified circumstances.

• "Under the arrangements, we agreed to pay Binance a monthly incentive fee," Circle said.

• The company added that Binance has agreed to undertake certain other activities to promote USDC on its platform.

• Shares of Circle are up roughly 19 per cent so far this year, giving it a market cap of about $24 billion.