Circle Internet Financial, the company behind the widely used stablecoin USDC, is preparing for a public listing, but new reports suggest a major shift could be on the horizon.
While Circle recently filed to go public in early April, insiders now claim the firm has been in quiet discussions about a possible acquisition, potentially by either Coinbase or Ripple, two of the biggest names in the crypto sector.
An IPO in Progress, But with Uncertainty
According to SEC filings, Circle has already taken formal steps toward an initial public offering (IPO), aiming for a valuation around $5 billion. However, sources close to the matter have suggested the company may be weighing alternative options behind the scenes.
Despite its active IPO filing, multiple executives in banking and private equity say Circle has also explored buyout conversations, though these discussions have remained informal. One source described the IPO effort as genuine yet fluid: “Things are evolving week by week.”
The Coinbase-Circle Connection
Coinbase has a longstanding relationship with Circle, having jointly launched the Centre Consortium in 2018 to govern USDC. Although that partnership was formally dissolved in 2023, it left behind a tightly interwoven commercial structure.
Coinbase still earns a share of the revenue generated from USDC’s reserve interest, particularly when those reserves are held on Coinbase’s platform, where it claims 100% of the earnings.
This arrangement places Coinbase in a uniquely advantageous position should an acquisition move forward. The two firms are financially entangled to a degree that some insiders view a merger as almost inevitable.
“I feel like they’re already operating as one entity,” a financial executive close to the talks remarked.
Moreover, Coinbase’s financial capacity adds to the likelihood. The exchange reportedly has $8 billion in cash reserves and access to the public markets, making it well-positioned to fund a major acquisition using either capital or equity.
Ripple’s Strategic Interest—and a Rejected Bid
While Coinbase is a natural contender, Ripple is also reportedly in the mix. The blockchain payments company has made an unsolicited offer to buy Circle for between $4 billion and $5 billion, a bid that was ultimately turned down for not meeting Circle’s valuation expectations.
However, Ripple’s offer was significant. The company currently holds over 4.5 billion XRP (valued at more than $11 billion) and controls an additional 37 billion XRP in escrow. These reserves offer Ripple a powerful mix of liquidity and crypto-native assets, which could be used creatively in any acquisition proposal.
If Ripple were to pursue the deal more aggressively, it would mark one of the largest crypto-related buyouts in history.
IPO Market Shows Signs of Revival
The potential sale of Circle comes at a time when crypto-related IPO activity is beginning to stir again after years of stagnation. Platforms like eToro recently saw successful listings, signaling that investor appetite for digital asset firms may be returning.
Circle’s IPO could benefit from this broader sentiment shift, provided it can overcome market skepticism and regulatory uncertainty.
Still, competition in the stablecoin space is intensifying. PayPal’s PYUSD has entered the scene, and Tether remains the dominant force. Circle must navigate this landscape while also addressing concerns about its revenue model, which heavily relies on interest income and favorable interest rates.
What’s Next for Circle?
Despite confirming its commitment to going public, Circle is facing mounting pressure. Regulatory scrutiny, rising competition, and the intricate financial ties with Coinbase all factor into a complex situation. Meanwhile, a well-capitalized Ripple remains in the wings, ready to make another move.
Whether Circle ends up as a publicly traded company or becomes part of a larger crypto conglomerate remains to be seen. One thing is clear: its future will significantly influence the stablecoin market and the broader shape of crypto-financial infrastructure.
