Why Circle Rejected $5 Billion Bid from Ripple (XRP)?

Updated

May 7, 2025

Gambar Why Circle Rejected $5 Billion Bid from Ripple (XRP)?

Jakarta, Pintu News – Circle, the fintech company leading the stablecoin market, recently rejected a $5 billion acquisition offer from Ripple . The decision came as a surprise to many given the size of the offer. However, there are some strategic reasons behind the rejection that are worth understanding. Check out the full story here!

Ripple’s Offer Considered Insufficient

Although the offer from Ripple reached $4-$5 billion, Circle felt that the value was still too low. Previously, Circle had attempted a merger through SPAC at a valuation of $9 billion. Although the merger did not happen, USDC’s market capitalization and Circle’s revenue continued to increase.

With annual revenue of $1.68 billion and USDC’s market capitalization of $61.5 billion, Ripple’s offer is only worth about three times their revenue, a multiplication considered low for a fast-growing fintech company.

Circle prefers to focus on their IPO plans that have been filed on the New York Stock Exchange in early April. An IPO is not just about cashing in on profits, but also about gaining regulatory clarity, increasing transparency, and strengthening trust with institutional partners as well as their users.

Strategic Independence is Critical

One of the keys to Circle’s success is its strategic independence. USDC operates across multiple blockchains and is integrated with various financial institutions, payment gateways, and crypto platforms. If it accepts the offer from Ripple, USDC will be under the control of a single entity that has its own competitive interests.

Circle management was concerned that this could jeopardize their partnership and compromise USDC’s dominance in widespread adoption. The cooperation and partnerships that had been built with various parties were valuable assets that they did not want to risk.

Circle chose to maintain control over their operations and strategy, which was ultimately deemed more beneficial in the long run.

Also read: 5 Memecoins Investors Are Hunting Before Donald Trump’s Crypto Dinner!

Reputation and Compliance are Priorities

Circle has put their reputation for compliance at the foundation of their business model. Unlike Ripple who are still trying to clean up their issues with the US Securities and Exchange Commission (SEC). Circle has spent years building a regulatory-focused image, with transparent reserves and open books.

Accepting an offer from Ripple could have shaken the confidence of USDC’s largest institutional users, including hedge funds, family offices, and even banks that are starting to open up to stablecoins. Perception is power, and Circle chose not to take a risk that could damage the reputation they’ve worked so hard to build.

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