Circle, the U.S.-listed issuer of the USDC stablecoin, has reportedly inked a revenue-sharing agreement with Bybit, the world’s second-largest cryptocurrency exchange, according to insiders familiar with the arrangement. This move adds another layer to Circle’s strategic efforts to expand USDC’s footprint amidst fierce competition from Tether and a surge of new stablecoin projects.
Circle’s Strategic Maneuvering
In an environment where stablecoin dominance is fiercely contested, Circle’s collaboration with Bybit seems to be a calculated step to bolster USDC’s market presence. The specifics of the agreement remain under wraps, but it likely follows a similar framework to Circle’s existing arrangements with Coinbase and Binance. These deals typically involve sharing a portion of the yield from USDC’s reserve assets, incentivizing platforms to promote USDC usage.
Circle’s aggressive expansion strategy isn’t new. The company’s pre-IPO filing disclosed that Binance received a hefty upfront payment of $60.25 million, supplemented by ongoing incentives tied to USDC balances. This approach has been instrumental in proliferating USDC across major cryptocurrency exchanges.
The Stablecoin Battlefield
The stablecoin sector is bustling with activity, and Circle faces formidable opponents. Tether’s USDT, with a staggering supply of approximately $160 billion, dwarfs USDC’s circulation of nearly $62 billion. Yet, Circle remains undeterred, leveraging its strategic partnerships to close this gap. The recent deal with Bybit could be pivotal in this quest, especially as new players like the Robinhood-backed Global Dollar (USDG) enter the scene with innovative revenue-sharing models. As explored in JPMorgan’s analysis of the stablecoin market, the market is expected to grow significantly, though not as rapidly as some forecasts suggest.
An insider involved in cryptocurrency infrastructure noted, “You should assume any exchange that has some material amount of USDC has an agreement with Circle.” This suggests that Circle’s network of revenue-sharing partnerships might be more extensive than publicly acknowledged, reinforcing its commitment to cementing USDC’s position in the market.
Implications for the Market
For Bybit, aligning with Circle could mean enhanced liquidity and more robust trading volumes, providing a competitive edge in the exchange space. It also underscores the growing importance of stablecoins as foundational components of the digital asset ecosystem, facilitating seamless transactions and liquidity management.
However, this strategic alliance raises questions about the sustainability of such revenue-sharing models. As more exchanges potentially enter similar agreements with stablecoin issuers, the financial dynamics could shift, affecting the profitability and operational strategies of these platforms. This concern echoes JPMorgan’s warning that the stablecoin market may not meet some of the more optimistic projections.
Circle’s representative and Bybit have both declined to comment on the specifics of their arrangement, leaving market participants to speculate on the potential ramifications. Nevertheless, this deal signifies a noteworthy development in the stablecoin landscape, hinting at further consolidation and innovation in the sector.
As the stablecoin competition heats up, the industry will be watching closely to see how these alliances shape market dynamics and influence the adoption of digital currencies. The question remains: can Circle’s strategic partnerships propel USDC to rival Tether’s dominance, or will new entrants disrupt the status quo? The answers will unfold in the coming months, as the crypto world continues to evolve at breakneck speed.
Source
This article is based on: Circle Has USDC Revenue Sharing Deal With Second-Largest Crypto Exchange ByBit: Sources
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
