Circle, Behind USDC, Eyes $5 Billion Sale to Coinbase or Ripple

Circle Internet Financial, the company behind USDC, the second-largest stablecoin, is considering a potential sale to either Coinbase or Ripple. This news comes as Circle is also exploring an Initial Public Offering (IPO). According to sources familiar with the matter, these discussions are informal takeover talks, with Circle aiming for a valuation of at least $5 billion.

Ripple had previously offered up to $5 billion to acquire Circle, but this bid was reportedly rejected as undervalued. The proposed deal from Ripple likely included a significant portion of the payment in XRP tokens. While these tokens are valued at market rates, they may be heavily discounted by a potential seller like Circle, which is preparing for a traditional IPO. This could mean that the effective value of Ripple’s offer fell below Circle’s minimum threshold of $5 billion.

Circle may have set its firm floor at $5 billion, leaving little room for compromise. It’s possible that Ripple’s bid was lower than its stated $4–5 billion range or had terms that made it less attractive. Even if Ripple matched the price, Circle might prefer a sale to Coinbase due to their deep operational and commercial ties, including shared USDC revenue and governance history.

Coinbase recently completed a $2.9 billion deal to acquire Deribit, a move expected to strengthen its position in the crypto options market. In a statement following this deal, Coinbase CEO Brian Armstrong revealed that the company is still open to further acquisitions. Armstrong mentioned that Coinbase is consistently on the lookout for M&A opportunities, particularly with like-minded international firms that could accelerate its product development and growth. When asked if Circle might be considered, Armstrong neither confirmed nor denied, stating there was “nothing to announce” at the time.

The potential sale of Circle to either Coinbase or Ripple could significantly reshape the dynamics of the cryptocurrency market. Coinbase, one of the largest cryptocurrency exchanges, has a strong presence in the retail and institutional markets. Acquiring Circle would enhance its stablecoin offerings and strengthen its position as a comprehensive financial services provider. Ripple, known for its focus on cross-border payments, has a strong presence in the enterprise sector. A merger with Circle could bolster Ripple's stablecoin capabilities and expand its reach in the financial services industry.

Circle's potential sale to either Coinbase or Ripple underscores the evolving landscape of the cryptocurrency industry. As more companies explore IPOs and strategic acquisitions, the market is likely to see increased consolidation and collaboration. This trend could lead to the emergence of larger, more integrated financial services providers that offer a wide range of products and services, including stablecoins, trading platforms, and payment solutions. The potential sale also highlights the importance of stablecoins in the cryptocurrency ecosystem, as they provide a stable store of value and facilitate transactions in a volatile market.

The potential sale of Circle to Coinbase or Ripple comes at a time when the cryptocurrency industry is facing increased regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has been actively pursuing enforcement actions against various cryptocurrency companies, and the outcome of these cases could have significant implications for the industry. The potential sale of Circle could provide a strategic advantage for either Coinbase or Ripple, as it would allow them to leverage Circle's regulatory expertise and relationships with financial institutions. This could help them navigate the complex regulatory landscape and position themselves as leaders in the cryptocurrency industry.