Binance buys $100 million stake in Circle, expands partnership

New business data points to the fact that Circle stated on Tuesday that Binance has purchased a $100 million stake in the stablecoin issuer, deepening the crypto exchange's ties with the firm behind USDC, a major dollar-pegged token.

Circle shares were last up nearly 2% in premarket trading.

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 stated.

The firm further noted that Binance has agreed to undertake certain other activities to promote USDC on its platform.

Shares of Circle are up roughly 19% so far this year, giving it a market cap of around $24 billion.