Ripple Offers $5 Billion To Buy Circle, Proposal Rejected

According to Larry Fink of BlackRock, tokenization is projected to exceed a trillion dollars by 2030. This is a massive opportunity, and Ripple, the private company behind XRP and its On-Demand Liquidity (ODL) platform, aims to become a major player.

After launching RLUSD, a stablecoin pegged to the USD and backed primarily by U.S. Treasuries, Ripple is reportedly planning to expand its footprint further.

Yesterday, reports surfaced that Ripple offered $5 billion to acquire Circle, the issuer of USDC, but the proposal was quickly rejected and dismissed.

Currently, Circle is the second-largest stablecoin issuer, trailing Tether Holdings. It maintains a strong presence in the United States and Europe, where USDT recently exited due to MiCA regulations.

Unlike Tether, which has not yet released an audit from a top-four firm, Circle complies with the law and is registered with the U.S. Financial Crimes Enforcement Network (FinCEN). Moreover, for transparency, Circle publishes monthly reserve attestations conducted by Grant Thornton.

What Is Circle And USDC? Why Was The Deal Rejected?

Insiders say the offer was rejected because it was too low and didn’t factor in Circle’s growth potential, which makes sense.

Circle has been growing, with USDC expanding rapidly over the years. It plays an integral part in DeFi, facilitating trading, lending, and yield farming on blockchains like Ethereum and Solana.

The stablecoin issuer has forged partnerships with major financial institutions such as Visa and Mastercard, and BlackRock has chosen USDC as its preferred stablecoin for digital payments and remittances.

The stablecoin issuer is also planning to list on the NYSE in the coming months.

Focus On XRP Crypto: Which Way Next?

It’s unclear whether Ripple will submit an improved offer or not. If Circle accepts, RLUSD could absorb USDC’s market cap and leverage Circle’s DeFi integrations and top-tier partners. This could propel the XRP crypto price, possibly pushing it above $3.50 and $10 by the end of the year. If Ripple manages to acquire Circle, RLUSD, which serves as a feeder to XRP, could experience a surge in demand.

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However, some believe that this deal could diminish the role of XRP as a payment token.

Despite its features and a ruling that XRP is not a security, placing it in the same category as Bitcoin, which the SEC recognized as a commodity, XRP has struggled to gain traction. Only a few banks and payment processors use ODL in remittance since most of them prefer SWIFT.

Additionally, more global remittance payments are now routed through stablecoins, not XRP, and even some of the best cryptos to buy, like Litecoin or Stellar.