- Circle is exploring a sale worth over 5 billion while still moving forward with its IPO registration.
- Coinbase and Ripple are both interested in buying Circle as control of USDC becomes more important.
- Coinbase has enough cash and crypto assets to fund the deal without needing outside investment.
Circle is considering a possible sale valued at over $5 billion. Talks are ongoing while Circle proceeds with plans for an initial public offering. In April, the company officially registered its IPO with the U.S. Securities and Exchange Commission. The registration did not include a valuation.
Coinbase and Ripple Among Potential Buyers
Two possible buyers have emerged. Coinbase, a longtime partner of Circle, and Ripple, a recent competitor, are both in the running. Ripple reportedly offered between $4 billion and $5 billion last month. However, Circle rejected the offer, calling it too low. Despite Ripple’s interest, Circle might prefer Coinbase due to their strong working history.
Coinbase and Circle jointly launched the CENTRE Consortium to manage USDC. USDC remains the top stablecoin on the Coinbase platform. Circle paid Coinbase nearly $900 million in distribution costs in 2023. This payment highlights the financial importance of their partnership.
Ripple’s Offer Involves Cryptocurrency and Cash
If Ripple makes another offer, the payment would likely involve XRP and cash. XRP is Ripple’s native cryptocurrency. In contrast, Coinbase would fund the acquisition using cash and stock. These differing payment structures could influence Circle’s decision.
Even at a matching price, Circle could choose Coinbase. Their close relationship and shared business interests may carry more weight than the offer amount. Ripple, on the other hand, poses a competitive risk in the stablecoin market.
Stablecoin Market Grows More Competitive
The stablecoin market is rapidly evolving. It is now competing with established financial networks like Visa and Mastercard. USDC remains one of the leading stablecoins by market presence. Whoever gains control of USDC could take a major role in future payment systems.
Coinbase recently acquired Deribit for $2.9 billion. This deal expanded its position in the crypto options space. After that, Coinbase CEO mentioned ongoing interest in acquisitions. While he avoided confirming Circle talks, industry insiders believe the possibility remains strong.
Coinbase Financial Position Supports Acquisition
Coinbase has a solid financial base. Reports suggest the company holds $8.5 billion in cash and $2.8 billion in cryptocurrency. These assets total $11.3 billion in liquid funds. That amount would be enough to complete the deal without outside funding. However, the transaction might still require financial restructuring or internal adjustments.
Coinbase’s stock recently jumped 25% after news of its inclusion in the S&P 500 index. Despite the rise, it still trades below its peak. Yet, the company’s market confidence and cash reserves signal strength. If the sale proceeds, it could reshape control over the future of stablecoins.
