Binance Bets $100 Million on Circle Shares, Five-Year Deal to Boost USDC

The GENIUS Act's Section 4(a)(11), enacted in July 2025, now explicitly bars permitted stablecoin issuers from paying holders any interest or yield tied to holding tokens, locking in a business model built on reserve income the issuers keep entirely. Tether, issuer of USDT, ranks as the 17th-largest holder of US Treasuries globally with approximately $141 billion in direct and indirect Treasury exposure as of Q1 2026, per its BDO Italia attestation, while Morgan Stanley projects stablecoin issuers could collectively hold $1.2 trillion in US Treasuries by 2030. Circle's FY2025 SEC 10-K showed $2.75 billion in total revenue, of which $2.64 billion, or 96%, came from reserve income, yet the company still posted a $70 million net loss as distribution costs reached $1.66 billion, including approximately $1.36 billion to Coinbase and a $152.1 million increase attributable to Binance. Tether, lacking a partner on Coinbase's scale, retains roughly 3.0 to 3.5 cents per dollar annually versus Circle's 0.8 to 1.0 cents, posting $13 billion in net profit in 2024 and $1.04 billion in Q1 2026 with excess reserves of $8.23 billion. In September 2026 Circle sold $100 million in equity to Binance, 1,237,011 Class A shares at $80.84 per share, a 5% discount, alongside a five-year agreement paying Binance a monthly incentive fee on USDC held through Circle's Modular Smart Contract Wallet infrastructure, as the January 18, 2027 enforcement cliff approaches with Tether holding roughly 60% market dominance and Circle at 24%.

The Trump administration is considering a plan to promote overseas use of dollar-denominated stablecoins through joint ventures with private companies, Bloomberg reported on September 23. The aim is to shore up the dollar's status as the world's reserve currency and boost demand for US Treasuries. The backdrop is the GENIUS Act, enacted in July 2025, which established a federal regulatory framework for payment stablecoins and required issuers to hold one-to-one backing in US dollars or short-term Treasuries. The US Treasury published proposed rules on August 17 to implement the law and opened a public comment period, with the law scheduled to take effect on January 18, 2027. According to the Treasury, stablecoin issuers already hold about 200 billion dollars' worth of US Treasuries and short-dated government securities. The plan is said to involve the Treasury, the State Department, and the US International Development Finance Corporation, but it remains under consideration, and the target countries, partner companies, funding scale, and timing have not been disclosed.

Banks risk losing $230 billion in payments revenue as stablecoins, tokenized deposits and central bank digital currencies move from experimentation to commercialization, according to the Capgemini Research Institute's World Payments Report 2027. The report projects these instruments will account for approximately 4% of global payments volume by 2030, eroding high-margin revenue streams such as foreign exchange spreads, correspondent banking, float income and transaction processing fees. Widespread adoption could unlock as much as USD 4 trillion currently trapped in settlement and liquidity accounts, while nearly 60% of corporate clients say they are willing to source stablecoin services from non-bank providers if their banking partners fail to keep pace. Banks identify tokenized deposits as their top near-term priority, yet only 21% of banks, classified as leaders, are actively scaling at least one accelerated intelligent money instrument, while the remaining 79% are still evaluating their position. Jeroen Hölscher, Global Head of Payment Services at Capgemini, said the industry is entering its most significant period of disruption since the emergence of digital banking, and that with $230 billion at stake banks must decide what role they want to play in the emerging ecosystem.