According to new reports, Circle, the peer-to-peer payments technology firm managing the stablecoin USDC, is informally in talks with Coinbase Global and Ripple Labs
The peer-to-peer payments technology firm managing the stablecoin USDC, Circle, is reportedly in informal talks with Coinbase Global and Ripple Labs over a possible long-term acquisition. This development arises as Circle prepares for its initial public offering (IPO).
According to a report by Fortune, four banking and private equity executives, who preferred anonymity, stated that Circle is aiming for a minimum sale valuation of $5 billion, aligning with its IPO target.
"If an offer lands in their lap, Circle will likely 'sell in a heartbeat' to Coinbase," said one of the executives, highlighting the U.S. crypto exchange giant as a prime candidate for acquisition.
Another executive expressed optimism for the coming week, adding, "Things change week by week."
The equity executives noted that Circle is still planning to go public, having filed in April to list its Class A common stock on the New York Stock Exchange (NYSE) under the "CRCL" symbol with the U.S. Securities and Exchange Commission (SEC). However, the IPO terms are yet to be disclosed.
While Ripple's bid to purchase Circle for around $4 billion to $5 billion was reportedly rejected in April, its balance sheet, boasting 4.5 billion XRP valued at $11.77 billion and $95.7 billion in funds held in escrow, makes it a strong contender.
On the other hand, Coinbase's longstanding partnership with Circle is no less significant. In 2018, Circle engaged Coinbase to launch a joint venture that led to the issuance of the USDC stablecoin, and later Coinbase took an equity stake in Circle.
"They're [Circle] going public doesn't change anything about our commercial relationship, but in terms of other deals we might be able to do in the future, I mean, that, of course, would be up to them and us, but, you know, nothing to announce today." Brian Armstrong, the CEO of Coinbase, responded to a question about potentially acquiring Circle during a May interview with Bloomberg.
