Circle Seeks $5 Billion Acquisition by Coinbase Amid IPO Plans

Circle, the issuer of the USDC stablecoin, is reportedly seeking at least $5 billion for a potential acquisition by Coinbase. This development comes as Circle has been preparing for an initial public offering (IPO), but an acquisition could potentially derail those plans. The company filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) last month, indicating its intent to go public. However, if an acquisition by Coinbase or another entity materializes, Circle may abandon its IPO aspirations.

Circle and Coinbase have a long-standing relationship, having co-created the USDC stablecoin in 2018. The two firms jointly managed the asset through the Centre Consortium until 2023, when Circle announced it would take full control of USDC’s governance and operations. Coinbase, which became a public company in April 2021, has an equity stake in Circle and receives revenue from USDC reserves. This existing partnership could facilitate a smoother acquisition process.

Ripple, another major player in the cryptocurrency space, has also reportedly shown interest in acquiring Circle. According to sources, Ripple submitted an offer with a bid of $4-5 billion, but Circle rejected the proposal. This rejection suggests that Circle may be holding out for a higher valuation or may prefer an acquisition by Coinbase due to their existing relationship.

The potential acquisition of Circle by Coinbase would have significant implications for the cryptocurrency market. Coinbase, as one of the leading crypto exchanges, could leverage Circle’s stablecoin technology to enhance its offerings and solidify its position in the industry. For Circle, an acquisition by Coinbase could provide the resources and support needed to further develop and expand its stablecoin ecosystem. However, the outcome of these discussions remains uncertain, and it is possible that Circle may ultimately proceed with its IPO plans if a suitable acquisition offer does not materialize.