Ripple reportedly offered to buy stablecoin issuer Circle for up to $5 billion, but the deal was turned down.
Background:
- Ripple, the blockchain firm behind the XRP Ledger, reportedly made an acquisition offer of $4 billion to $5 billion to stablecoin issuer Circle, according to a Bloomberg report citing anonymous sources.
- Circle is the company behind USDC, the second-largest dollar-pegged stablecoin in the market after Tether’s USDT. The offer was reportedly rejected for being too low.
- The news comes shortly after Circle filed a prospectus for an initial public offering (IPO), marking another attempt to go public after a 2022 blank-check merger deal that valued the firm at $9 billion failed to go through.
Why should you pay attention?
- Ripple is expanding its footprint in the stablecoin market, having recently launched RLUSD, its own U.S. dollar-pegged token.
- A successful acquisition of Circle would have massively reshaped the stablecoin market, potentially altering the competitive dynamic between USDC, Tether, and other emerging tokens.
- The report also comes as Ripple looks to scale its operations and navigate regulatory relief, following key developments in its legal battle with the U.S. SEC.
Who said what?
- Bloomberg reported:
“Ripple has proposed a takeover of rival stablecoin provider Circle Internet Group Inc. for $4 billion to $5 billion, a bid that was rejected as too low.”
Adding:
“While Ripple remains interested in Circle, it hasn’t decided whether to make another offer.”
- Brad Garlinghouse, CEO of Ripple, previously described the company’s $11 billion valuation as “outdated” and has been actively acquiring strategic firms, such as Hidden Road, a crypto prime broker it bought for $1.2 billion in April.
- Regarding regulatory issues, Garlinghouse stated in March:
“The SEC plans to drop its appeal,” after Ripple agreed to pay a net $50 million settlement stemming from a case originally filed in 2020.
Zooming out:
- The Circle rejection reflects broader valuation gaps in crypto mergers and acquisitions (M&A) discussions as companies reassess their public and private market worth amid shifting sentiment.
- Ripple’s renewed interest in stablecoins and institutional expansion suggests it is aggressively positioning itself for the next phase of crypto adoption, particularly in payments and tokenized finance.
- The outcome of its regulatory entanglements and ongoing lobbying efforts in Washington, including a $5 million donation to President Trump’s inauguration fund, may further influence Ripple’s long-term strategy, possibly paving the way for future acquisition plays like Circle.
