Ripple has reportedly made a high-stakes attempt to acquire Circle, the company behind the widely used USD Coin (USDC), in a deal valued between $4 billion and $5 billion. Despite the scale of the offer, Circle turned it down, arguing that the proposal did not match its actual market value.
The move by Ripple was viewed as a strategic push to gain influence in the booming stablecoin market. With USDC holding a market capitalization of approximately $62 billion, the acquisition would have instantly transformed Ripple into a major player in the space.
Ripple’s own stablecoin, RLUSD, launched last year and currently sits at just over $300 million in market cap.
Ripple leadership recently declared that the company would not conduct an IPO or similar offering and continues to operate in an acquisitive mode only. The company recently displayed its acquisition power when it bought Hidden Road Prime Brokerage through a transaction worth $1.25 billion.
The acquisition turned out to be one of the largest deals in the digital asset market, which showed Ripple’s commitment to expanding through strategic acquisitions.
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Circle Declines Ripple’s Offer, Focuses on IPO Path
Circle has remained focused on its plan to go public and filed the required paperwork earlier this month. The company has not directly addressed the acquisition news, instead referring to the reports as “market rumors.” However, sources close to the situation confirmed Ripple’s approach and the subsequent rejection.
The timing of Ripple’s bid is seen as notable, as it coincided with Circle’s ongoing IPO preparations. Ripple presented a bid spanning between $4 billion to $5 billion, which did not reach Circle’s anticipated valuation.
The offer ended when Circle rejected this valuation without considering discussions for modifications. Ripple has not ruled out the possibility of making a renewed offer, as discussions within the company reportedly continue, though no decision has been finalized.
Circle has prior experience with major acquisitions, having purchased Poloniex in 2018 for $400 million. That deal later resulted in a financial loss of about $156 million, leading to Poloniex being spun off in 2019. Since then, Circle has concentrated its efforts on USDC’s growth and public market entry.
Ripple Intensifies Competition in Stablecoin Market
Ripple’s interest in Circle highlights the increasing importance of stablecoins in the digital asset ecosystem. With institutional usage of stablecoins continuing to rise, the company sees significant value in expanding its footprint through acquisition.
The stablecoin market is largely dominated by USDT and USDC, and Ripple’s current RLUSD token holds only a small share. A successful acquisition of Circle would have rapidly boosted Ripple’s presence, giving it control of the second-largest stablecoin by market cap.
While the initial bid was turned down, Ripple’s broader strategy suggests more activity may follow. The company’s direction indicates a strong interest in shaping the future of digital payments through asset-backed tokens and infrastructure development.
Conclusion
Ripple’s attempt to acquire Circle signals a major move in the ongoing race to dominate the stablecoin space. With Circle continuing its IPO journey and Ripple exploring more acquisition opportunities, the industry could witness further power shifts in the coming months.
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