Circle’s Potential IPO and Acquisition Talks: A Closer Look
Circle, known for issuing the USDC stablecoin, is making strategic maneuvers in the financial market. As the company prepares for an initial public offering (IPO), industry reports reveal ongoing informal discussions about a possible acquisition by either Coinbase Global or Ripple, casting some doubt over the IPO timeline.
Circle’s Readiness to Partner with Coinbase
Insiders close to the matter have shared with Fortune that Circle is seeking a valuation of no less than $5 billion—mirroring its IPO target. A banker involved in the discussions stated that Circle would readily accept a genuine offer from Coinbase, underscoring the strong ties between the two entities. “If Coinbase wanted to buy them, Circle would sell in a heartbeat,” remarked a source, highlighting the dynamic nature of these negotiations.
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Despite these talks, Circle remains committed to its IPO plans, although the terms are not yet set, nor has a roadshow been initiated. The partnership between Circle and Coinbase dates back to 2018, when they co-founded the Centre Consortium, the entity responsible for issuing USDC. In 2023, as their joint venture concluded, Coinbase acquired a stake in Circle, while Circle assumed full governance over USDC.
The financial relationship between Circle and Coinbase has been mutually advantageous, with both parties splitting the revenue from USDC’s reserves. Circle’s S-1 filing explains that each company receives 50% of the residual revenue. However, when USDC is held on Coinbase’s platform, Coinbase retains all the revenue, a situation that has likely become more common given Coinbase’s growing earnings from this collaboration.
Ripple’s Competitive Edge in Acquisition Talks
Ripple has also shown interest in acquiring Circle, reportedly proposing a deal valued between $4 billion and $5 billion. However, this offer was deemed insufficient, as per a report by Bitcoinist. Should Ripple proceed with an offer, it would likely involve a mix of its cryptocurrency, XRP, and cash, utilizing Ripple’s robust financial resources, which include billions in XRP holdings.
Conversely, Coinbase has the capability to fund an acquisition with cash and stock, boasting around $8 billion in cash as of March 31, 2025. Coinbase CEO Brian Armstrong has indicated the company’s willingness to engage in mergers and acquisitions, emphasizing the need for effective integration post-purchase.
Market analyst Paul Barron recently suggested on social media platform X (formerly Twitter) that Ripple might have an upper hand in acquiring Circle, with a potential valuation ranging from $9 to $11 billion.
As of now, XRP faces challenges in surpassing the $2.65 resistance level. XRP trades at $2.38, marking a 14% monthly increase. Since the beginning of the year, XRP has outperformed the top ten cryptocurrencies, boasting a remarkable 367% growth.
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