Another day, another crypto controversy. Ripple and Coinbase are reportedly engaged in a high-stakes bidding war to acquire Circle, the company behind the USDC stablecoin, with a potential price tag reaching $11 billion. This deal could reshape the stablecoin market and the broader crypto ecosystem.
If Ripple secures Circle, it would not only control a leading dollar-pegged asset but could also cement its dominance across the crypto space. However, not everyone is on board, with critics raising concerns about antitrust issues and market instability.
Why This Deal Matters
Here’s why the Ripple-Circle acquisition is causing a stir.
A Recipe for Disaster?
Gabriel Shapiro, founder of MetaLeX Labs, didn’t mince words about the potential fallout.
“Allowing Ripple to become the largest asset issuer across every blockchain would be disastrous and anticompetitive,” Shapiro cautioned, flagging significant antitrust risks.
He argues that regulators, including the DOJ and FTC, would likely block the deal. Shapiro also referenced Ripple’s past actions, such as its 2022 campaign with Greenpeace to criticize Bitcoin mining, as evidence of its willingness to undermine competitors. He urged Circle to consider the Revlon doctrine, which prioritizes shareholder interests, including evaluating antitrust risks.
Bidding War Heats Up
Sources indicate Ripple initially offered $4–5 billion for Circle earlier this year but was rebuffed. Now, Ripple is reportedly back with a higher bid, possibly leveraging its $40 billion XRP reserves (valued at $2.37 per token) alongside cash. However, liquidating these tokens requires court approval, complicating the deal.
Coinbase, with $8.5 billion in cash and $2.8 billion in crypto investments, remains a formidable contender but has yet to make a decisive move, leaving some puzzled.
What’s Next for Circle?
While Ripple is pushing hard, Coinbase may have an advantage with U.S. regulators, who could scrutinize Ripple’s bid more closely. One banker suggested Circle would “sell to Coinbase in a heartbeat” if the offer was right.
There’s also the possibility of an unexpected player, like Japan’s SBI Holdings, a major XRP holder, entering the fray.
Ripple’s pursuit of Circle could transform the stablecoin landscape, but as Shapiro warns, it might also trigger a pivotal moment for crypto’s future—one that could bring significant regulatory and competitive challenges.
