Ripple, Coinbase Race to Acquire Circle as USDC Issuer Eyes IPO or Buyout

In April 2025, Circle filed an S-1 registration with the SEC, signaling its intent to go public on the New York Stock Exchange under the ticker symbol "CRCL." The company aims for a valuation between $4 billion and $6 billion, with backing from financial heavyweights JPMorgan Chase and Citigroup as lead underwriters. This move follows a previously unsuccessful attempt to go public via a special purpose acquisition company (SPAC) merger in 2021, which was valued at $9 billion but ultimately fell through.

However, economic uncertainties, including market volatility and shifting regulatory landscapes, have prompted Circle to consider delaying its IPO plans. The company remains committed to going public but is also exploring alternative strategies to ensure its long-term growth and stability.

Amid its IPO preparations, Circle has reportedly engaged in informal talks with Ripple and Coinbase regarding a potential sale. Ripple, known for its XRP cryptocurrency, made a bid ranging from $4 billion to $5 billion, which Circle declined, deeming it too low. Rumors suggest Ripple may have considered increasing its offer, but no official confirmation has been provided.

Coinbase, a long-standing partner of Circle, is viewed as a natural suitor. The two companies have a revenue-sharing agreement, with Coinbase distributing USDC on its platform. Analysts believe that Coinbase's acquisition of Circle could strengthen its position in the stablecoin market and enhance its overall crypto ecosystem.

Circle's financial health is closely tied to interest rates, as the company generates approximately 98% of its revenue from interest on short-term securities backing USDC. In 2024, Circle reported $1.67 billion in revenue, a 16% increase from the previous year. However, the company pays over 60% of its interest income to distribution partners like Coinbase, highlighting its dependency on these relationships.

This business model, while profitable in a high-interest-rate environment, exposes Circle to significant interest rate risk and revenue volatility. The company's reliance on partners for USDC distribution further complicates its financial stability and growth prospects.

Circle's decision to pursue an IPO or consider acquisition offers carries substantial implications for the cryptocurrency industry. An IPO would position Circle as a leading public crypto company, potentially attracting institutional investors and increasing regulatory scrutiny. Conversely, an acquisition by Ripple or Coinbase could consolidate market power and reshape the stablecoin landscape.

For Ripple, acquiring Circle would provide a more regulatory-compliant, fiat-backed alternative to its XRP-led model, aligning with its aim to integrate blockchain into global finance. However, such a deal would likely involve Ripple stock, adding risk for Circle investors.

Coinbase's potential acquisition of Circle could enhance its stablecoin offerings and solidify its role in the crypto economy. Given their existing partnership and shared history, this move could streamline operations and foster innovation within the sector.

Circle's current trajectory reflects the broader maturation of the cryptocurrency industry, where companies must balance growth ambitions with financial prudence and regulatory compliance. Whether Circle proceeds with its IPO or opts for acquisition, its decisions will likely influence the future of stablecoins and the integration of digital assets into traditional financial systems. As the industry evolves, stakeholders will closely monitor Circle's strategic choices and their ripple effects across the crypto landscape.