In early April, Circle Internet Financial, the company behind the widely used USDC stablecoin, filed preliminary documents with the SEC to advance its long-anticipated initial public offering (IPO). While the move signals a strong push toward going public, behind the scenes, discussions with major players in the crypto space—Coinbase and Ripple—have sparked speculation that Circle might instead be acquired.
According to four financial industry insiders familiar with the matter, Circle has engaged in informal talks about a potential sale to either Coinbase, the largest U.S. crypto exchange, or Ripple, the blockchain payments firm. These sources, who requested anonymity due to the confidential nature of the discussions, revealed that Circle is seeking a valuation of at least $5 billion—the same target it’s aiming for in its IPO plans.
“If Coinbase wanted to buy them, Circle would sell in a heartbeat,” said one investment banker with direct knowledge of the landscape.
Despite acquisition rumors, Circle maintains it is not for sale. In a statement sent to Fortune, the company affirmed: “Circle is not for sale. Our long-term goals remain the same.” However, market dynamics and strategic partnerships suggest the possibility of a merger or acquisition remains very much alive.
Strategic Ties Between Circle and Coinbase
Circle and Coinbase share a deep-rooted relationship that dates back to 2018, when they co-founded the Centre Consortium, a joint venture created to issue and govern the USDC stablecoin. Though the formal structure of Centre wound down in 2023, its legacy lives on through an intricate revenue-sharing agreement and operational interdependence.
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According to Circle’s S-1 filing, both companies receive 50% of residual interest income generated from USDC’s reserve assets. However, a critical clause gives Coinbase 100% of that revenue when USDC is held on its own platform—a scenario that has become increasingly common as Coinbase strengthens its position as a dominant custodian.
Beyond revenue, Coinbase holds significant influence over Circle’s operations:
- It must approve any new third-party partnerships that could impact its USDC revenue.
- In the event of Circle’s insolvency, Coinbase gains partial control over key intellectual property related to USDC.
These provisions make a potential acquisition not just financially logical, but operationally seamless.
“I feel like they’re one company,” remarked one source, highlighting how intertwined their businesses have become.
Ripple’s Competitive Bid and Financial Strength
While Coinbase appears to be the most natural suitor, Ripple has emerged as a serious contender. In April, Bloomberg reported—and Fortune has independently confirmed—that Ripple offered $4 billion to $5 billion to acquire Circle, a bid that was ultimately rejected as too low.
What sets Ripple apart is its massive liquidity in XRP, the native cryptocurrency it developed. As of March 31, 2025, Ripple held:
- 4.56 billion XRP (valued at ~$11.77 billion)
- 37.13 billion XRP (~$95.7 billion) held in escrow
A potential acquisition could involve a combination of cash and XRP, leveraging Ripple’s vast reserves. This approach would allow Ripple to expand beyond cross-border payments into the rapidly growing stablecoin ecosystem, where USDC ranks as one of the top three by market capitalization.
However, despite Ripple’s strong balance sheet, financial experts believe Coinbase remains the more credible buyer due to its public-market access and proven M&A track record.
“Though Ripple has a pretty meaningful balance sheet, Coinbase would still be viewed more favorably,” said the banker.
Coinbase’s M&A Strategy and Market Momentum
Coinbase CEO Brian Armstrong addressed acquisition rumors during a Bloomberg interview on May 14, expressing enthusiasm for Circle’s IPO but leaving the door open for future deals.
“They’re going public doesn’t change anything about our commercial relationship,” Armstrong said. “In terms of other deals we might consider in the future… nothing to announce today.”
Armstrong emphasized that while Coinbase actively evaluates mergers and acquisitions—thanks to its “pretty large balance sheet” and flexibility as a public company—it “doesn’t swing at every pitch.” The real challenge, he noted, lies in post-acquisition integration.
Recent moves support this disciplined approach:
- April 2025: Acquired prime brokerage Hidden Road for $1.25 billion
- May 2025: Finalized a $2.9 billion deal for Deribit, a leading crypto derivatives platform
- Also in May: Absorbed the team behind Iron Fish, a privacy-focused blockchain
- January 2025: Purchased Spindle, an on-chain advertising and attribution platform
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These acquisitions reflect Coinbase’s broader strategy: diversifying revenue beyond spot trading, strengthening infrastructure, and expanding into high-growth niches like derivatives and privacy tech.
IPO Market Shows Signs of Revival
Circle’s timing may be opportune. After years of stagnation following the 2021 crypto boom, the IPO market is showing signs of recovery. A key indicator came last week when eToro, the online trading platform, surged nearly 29% on its first trading day after raising $620 million at $52 per share.
While early performance is encouraging, some investors caution that long-term success depends on sustained aftermarket strength.
“You need more time to see how [newly public companies] play out,” said one institutional investor.
Coinbase itself went public in 2021 via direct listing and recently received another major boost: inclusion in the S&P 500 index, effective May 19. The announcement sent its shares up over 25% in a single week, though they currently trade around $265—below their 52-week high of $349.75—giving Coinbase a market cap of approximately $56 billion.
Core Keywords
- Circle IPO
- USDC stablecoin
- Coinbase acquisition
- Ripple XRP
- crypto M&A
- stablecoin market
- digital asset investment
- blockchain finance
Frequently Asked Questions (FAQ)
Q: Is Circle really going public?
A: Yes. Circle filed formal paperwork in April 2025 for an IPO and remains publicly committed to the process. However, no terms or roadshow dates have been set yet.
Q: Why would Coinbase want to buy Circle?
A: Coinbase already shares revenue from USDC reserves and holds operational influence over Circle. Acquiring Circle would consolidate control over one of the most widely used stablecoins and eliminate competition in a core infrastructure layer.
Q: Can Ripple afford to buy Circle?
A: Yes. With over $100 billion worth of XRP in circulation and escrow, Ripple has significant firepower. However, using XRP in an acquisition could introduce volatility and regulatory scrutiny.
Q: What is USDC?
A: USDC (USD Coin) is a dollar-pegged stablecoin issued by Circle. Each token is backed 1:1 by U.S. dollar reserves and is widely used for trading, lending, and cross-border payments in the crypto economy.
Q: How does Circle make money?
A: Circle earns interest income from investing the cash reserves backing USDC. Under current agreements, half of this income goes to Coinbase when USDC is held off-exchange.
Q: Could regulatory issues affect a potential sale?
A: Yes. Any acquisition involving major crypto firms would likely face scrutiny from U.S. regulators, especially given ongoing concerns about stablecoin oversight and market concentration.
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