XRP News Today: Ripple Eyes $5 Billion Circle Acquisition Amid Antitrust Concerns
2min read Ripple's expansion strategy this year has led to an attempt to acquire stablecoin issuer Circle. The New York-based issuer of USDC, the second-largest stablecoin, held informal talks with stablecoin rival Ripple and its long-time partner, Coinbase, about a potential sale, with the company seeking at least $5 billion. While Ripple seems more aggressive and owns a huge hoard of XRP tokens, Coinbase may still have the edge, given its deep history with Circle.
“If Coinbase wanted to buy them, Circle would sell in a heartbeat,” a source reportedly revealed. For Ripple, owning Circle would give it an instant seat at the table in the global stablecoin economy as the blockchain payments firm begins to clear some of its legal entanglements with US regulators. However, skeptics are already throwing up antitrust red flags and cautioning of a potential disaster if the deal with Ripple succeeds.
A popular lawyer has suggested that Ripple’s potential takeover of Circle could have a considerable negative impact on the wider crypto market. “This could end up being crypto apocalypse. Making Ripple the largest asset issuer on every blockchain would obviously be disastrous and anticompetitive,” MetaLeX Labs founder Gabriel Shapiro wrote on X. Shapiro pointed out that Ripple previously used its influence to harm its competitors by spreading fear, uncertainty, and doubt (FUD). In 2022, for instance, Ripple’s Chris Larsen teamed up with Greenpeace to force a BTC code change to reduce the energy use of the industry’s largest cryptocurrency by market value.
Moreover, Shapiro believes that even if the acquisition by Ripple is successful, it will likely fail to pass antitrust muster. Regulators review deals for antitrust concerns, indicating that they will determine whether the deal could give Ripple too much control over the stablecoin business. “If a definitive agreement is signed, we will be at the DoJ’s and FTC’s doorstep, citing Ripple’s history of campaigns against Bitcoin and Ethereum,” Shapiro continued. The pundit further argued that Circle should consider the Revlon doctrine, which posits that a company should choose the best deal for its shareholders — including weighing antitrust risk.
A prominent legal expert has issued a stark warning about the potential consequences of Ripple acquiring Circle, a move that could lead to a "crypto apocalypse." The expert cautions that such a merger would create an unprecedented level of market concentration, potentially stifling competition and innovation within the cryptocurrency sector. The acquisition would combine two of the most influential players in the industry, Ripple, known for its XRP token and payment solutions, and Circle, the issuer of the stablecoin USDC. This consolidation could result in a dominant entity that controls a significant portion of the market, raising concerns about monopolistic practices and the potential for abuse of power.
The legal expert's warning underscores the broader implications of such a merger on the cryptocurrency ecosystem. The concentration of power in the hands of a single entity could lead to a reduction in the diversity of cryptocurrencies and blockchain technologies, as smaller players may struggle to compete. This could hinder the development of new and innovative solutions, ultimately stifling the growth of the industry. Additionally, the expert highlights the potential regulatory challenges that such a merger would face. Regulators around the world are already grappling with the complexities of overseeing the cryptocurrency market, and the creation of a super entity could exacerbate these challenges. The expert suggests that regulators would need to closely scrutinize the merger to ensure that it does not lead to anti-competitive behavior or harm to consumers.
The expert's concerns are not unfounded, as the cryptocurrency market has already seen instances of market manipulation and abuse of power by dominant players. The expert warns that a Ripple-Circle merger could exacerbate these issues, leading to a "crypto apocalypse" where the market becomes dominated by a few powerful entities. This could result in a loss of trust in the cryptocurrency ecosystem, as users and investors become wary of the potential for abuse of power. The expert calls for a thorough review of the merger by regulators and stakeholders to ensure that it does not lead to such an outcome. The expert also suggests that the industry should consider alternative models of consolidation that promote competition and innovation, rather than creating a dominant entity.
