On Wednesday morning in Abu Dhabi, Binance and Circle announced a strategic partnership to promote USDC, a stablecoin jointly owned by Circle and Coinbase.

The collaboration comes as stablecoins gain traction in mainstream finance and competitors seek to challenge the dominance of market leader Tether.

The Alliance

Details about revenue sharing in this arrangement remain undisclosed, though sources informed Fortune that Binance will not acquire an equity stake in Circle.

According to the press release, the partnership aims to expand the worldwide adoption of USDC. Binance will incorporate USDC into its full suite of products and services, offering its 240 million global users access to the stablecoin for trading, saving, and payment applications.

As part of the agreement, Binance will adopt USDC as a core component of its corporate treasury. On the other hand, Circle will support Binance by providing the necessary technology, liquidity, and tools to enable user access to USDC while also working to strengthen relationships across global finance and commerce.

Coinbase welcomed the development, with Shan Aggarwal, its Vice President and Head of Business Development, stating, “As the list of USDC ecosystem partners expands, USDC circulation will continue to grow, helping to increase economic freedom around the world and lead the industry forward on a foundation of transparency and trust.”

Jeremy Allaire, Chairman and CEO of Circle, highlighted Binance’s innovation and its potential to make USDC a household name on its platform. Richard Teng, CEO of Binance, announced the exchanges plans of introducing more USDC trading pairs, special promotions, and new use cases for stablecoins globally.

Battle for Dominance

The stablecoin market is currently dominated by Tether, which holds a $138 billion market cap, significantly ahead of USDC at $40 billion. Despite allegations of questionable accounting practices and links to illicit activities, the firm remains a key player in the market.

Binance was previously a major competitor, with its native BUSD reaching a $23 billion market cap. However, regulatory pressure in 2023 forced it to wind down operations. Circle, during this period, criticized Binance and Tether as lacking compliance.

The latest partnership marks a shift in their relationship. After settling regulatory issues with the U.S. Justice Department, Binance has committed to an oversight regime, making it possible for the exchange to align with Circle’s regulated and trusted USDC.

However, this collaboration involves revenue-sharing arrangements among the three companies, potentially complicating efforts to unseat Tether’s dominance.

Meanwhile, other competitors are making moves to challenge the leading stablecoin issuer. Robinhood, Galaxy Digital, Kraken and Paxos, recently formed a consortium supporting the latest stablecoin offering (USDG) issued by Paxos.

In a November 5 statement, the company shared that the new ‘Global Dollar Network’ was designed to accelerate the global adoption and use of these assets worldwide.