Ripple wants to buy stablecoin providers Circle for 5 billion USD
The crypto company Ripple has proposed a takeover of the competing StableCoin provider Circle, issuer of the USD coins (USDC), for $ 4 to 5 billion. However, the offer was rejected as too low.
Ripple is still interested in circle. However, the company has not yet decided whether it would make another offer, reported Bloomberg with reference to insider sources. Circle, in turn, focuses on carrying out the IPO requested at the beginning of this month. The StableCoin provider previously wanted to go to the stock exchange for an assessment of $ 9 billion via a fusion with a purpose company. However, the deal was canceled at the end of 2022.
Stablecoin market in the sights of Ripple
Circle operates the second largest stable coin after market capitalization. It is a cryptocurrency, the value of which is bound $ 1: 1. To maintain the binding, Circle covers with a dollar in US state bonds or cash equivalents. The current interest rate of around 4% per year flows into the pocket. With a USDC market capitalization of $ 62 billion, Circle generated sales of USD 1.7 billion last year.
Ripple also wants to enter this market. The company wanted to enable inexpensive, cross -border transactions when it was founded in 2012. It should differ from a more scalable solution from Bitcoin. The basis of the network: the cryptocurrency XRP, formerly also called “ripple”. But in recent years, Ripple has had difficulty establishing XRP as a means of payment. Instead, the company is now focusing on stable coins. In October 2024 Ripple launched the RLUSDthat now occupies a market value of $ 316 million.
Focus on M&A
The sale of your own stable coin could be more difficult than originally expected from Ripple. However, the company has significant financial resources due to a monthly vesting of XRP token. According to the Q4 market report Ripple held 4.4 billion XRP at the end of last year with a current equivalent of $ 9.7 billion. A vesting contract per month releases another 1 billion XRP (2.2 billion USD), of which Ripple usually returns 80% back into the Smart Contract locked.
Ripple now uses these funds for strategic takeovers. In spring 2023 Ripple bought the Swiss crypto infrastructure provider Metaco for $ 250 million. A few weeks ago took over The company is also the Prime Broker Hidden Road for $ 1.25 billion. It is unclear whether Ripple finances the acquisitions via XRP sales or plunges. However, it seems that the company intends to continue its aggressive acquisition strategy.
