Article reprinted from: Odaily Planet Daily
Source: Forbes
Translated by: Moni, Odaily Planet Daily
Editor's note: The stablecoin market has a major news item—Ripple has made a $4-5 billion acquisition offer to its IPO-bound competitor, stablecoin provider Circle Internet Group! Yes, you heard it right, it’s Ripple, which just got the U.S. Securities and Exchange Commission to drop its appeal and acknowledge that XRP is not a security, but this offer was considered too low and was rejected. It is said that Ripple remains very interested in Circle but has yet to decide whether to make another offer.
For Ripple, a well-known crypto company in the industry, why is it attempting to acquire Circle at this time? Will Circle ultimately say 'Yes' or 'No'? In response to these questions, Forbes published an in-depth analysis of some 'insider' information, which Odaily Planet Daily has compiled and translated as follows, enjoy~
Why does Ripple want to acquire a stablecoin company?
Stablecoins require both scale and speed.
The news of Ripple's acquisition of the stablecoin company Circle may not sound like a typical acquisition deal, but for those familiar with Ripple's corporate strategic layout, acquiring Circle is actually 'both unexpected and within reason.'
In early April, Ripple acquired the brokerage firm Hidden Road for $1.25 billion and announced it would use the RLUSD stablecoin as collateral for its main brokerage products, shifting its post-trade activities to the XRP Ledger blockchain. Ripple believes this acquisition has the potential to optimize the cost and liquidity of its cross-border payment service, Ripple Payments, and provide custody services for Hidden Road's clients.
It is worth mentioning that Hidden Road has successfully obtained a brokerage license, meaning that this acquisition allows Ripple to legally access traditional financial tracks as an institution. XRP and RLUSD may evolve into liquidity bridge assets under institutional trading execution, repurchase financing, and even sovereign debt swaps, opening doors for tokenized government bonds, central bank digital currencies, and RWAs.
Clearly, Ripple's 'ambition' has surpassed the crypto track, and its power tentacles are beginning to penetrate deeper into traditional financial infrastructure, with stablecoins anchored to fiat currency undoubtedly being the best bridge to connect the worlds of crypto and traditional finance.
In fact, as early as mid-2024, Ripple CEO Brad Garlinghouse confirmed the stablecoin strategy and announced the launch of the stablecoin RLUSD at the XRP Ledger community summit. After obtaining approval from the New York Department of Financial Services (NYDFS), RLUSD was officially launched at the end of last year, with a current market cap of about $316.9 million, marking a good start.
However, for the current stablecoin market, which has a market cap close to $245 billion, RLUSD's performance has been lukewarm. If a 'cautious' strategy is adopted, it seems difficult to keep up with rapidly developing competitors, not to mention USDT with a market cap approaching $149 billion, USDC with a market cap of about $61.5 billion, or even USD1, which recently broke through a $2 billion market cap shortly after its launch; RLUSD's advantages are also not significant.
Thus, Ripple's acquisition of Circle is not only about expansion but also an acceleration strategy that enables it to achieve a curve overtaking, allowing Ripple to quickly secure a place in the global stablecoin economy.
Will Circle say 'Yes'?
From Circle's perspective, being acquired is not a bad thing.
First, the substantial funds have enough appeal. Ripple's $5 billion acquisition offer is very attractive, and such an infusion could significantly accelerate Circle's global expansion; additional funds could also drive deeper R&D and expand Circle's partnerships, especially in markets where infrastructure and access are still forming.
Secondly, the synergy between Ripple and Circle could unleash a 'Win-Win' potential. Ripple brings rich experience in navigating complex global regulations and a proven blockchain network, while Circle already has extensive stablecoin operational experience; combining the two could inspire the creation of entirely new financial products, such as tokenized payment systems, cross-border settlement innovations, and hybrid DeFi/TradFi solutions.
We also cannot overlook geographical advantages; Ripple has a solid international footprint. Its network extends far beyond U.S. borders, with strong relationships in Asia, Latin America, and Europe. Ninety percent of Ripple's business is conducted outside of the United States, which could drive USDC into rapidly growing markets where stablecoin adoption is still in its infancy.
Will Circle say 'No'?
While Ripple may reiterate its acquisition offer, Circle has temporarily rejected the bid on the grounds that it is too low. Based on the latest developments, Circle's decision may involve three reasons: valuation, vision, and regulation.
In terms of valuation, USDC's market cap is currently close to $62 billion, and with Circle's IPO plans in full swing, Ripple's acquisition offer at this time seems more like a 'speculation'. Circle is not a company seeking an exit but is moving towards a broader future in the stablecoin market; the $5 billion acquisition may not only underestimate Circle's financial status but also the strategic importance of USDC in the evolving digital dollar landscape.
Secondly, Circle has a clear vision, and merging with direct competitors could create friction. Although Ripple and Circle both operate in the stablecoin space, RLUSD and USDC are not entirely consistent in governance models and market strategies; an acquisition could lead to a realignment of priorities and potentially weaken Circle's mission-driven approach to open finance.
Third, the regulatory perspective cannot be ignored. The merger of two heavyweight companies in the crypto ecosystem will trigger stricter scrutiny from global regulators. Especially in the current environment—where U.S. lawmakers are actively defining a digital asset framework—this move could lead to significant operational slowdowns, legal complexities, and even resistance from certain jurisdictions.
What does Circle's decision mean for the market and stablecoins?
Circle's rejection of Ripple's acquisition is not just a story about price but a signal of belief—that Circle believes its independent strategy is stronger than a quick acquisition. As the IPO progresses, Circle is trying to establish USDC as the global standard for dollar-backed stablecoins, doubling down on its reputation for transparency, compliance, and innovation.
Meanwhile, Ripple will not give up on the 'big cake' of the stablecoin market. RLUSD is currently in the early stages of its lifecycle, but Ripple's actions indicate a long-term strategy aimed at integrating blockchain infrastructure with traditional finance. Whether through additional acquisitions, deeper ecosystem investments, or policy collaborations, Ripple will persist and fight for victory.
It can be said that stablecoins are no longer a simple crypto tool but are rapidly becoming a digital pipeline for global capital flows, a coveted power game—whoever controls the stablecoin standards, access, and integration points can shape the future of cross-border payments, institutional-level DeFi, and programmable finance.
The power game—greater than Circle and Ripple
For leaders in fintech, digital assets, and global payments: relying solely on market share won’t win the future; ‘winning’ relates to ecosystem coverage, interoperability, and trust. The stablecoin race is far from over, and the true winners will be those who can boldly innovate while maintaining enough resilience to cope with regulation, market fluctuations, and global demand. Stablecoins are becoming the core pillar of the cryptocurrency ecosystem, and in the coming years, the integration, competition, and regulatory dynamics surrounding 'compliant stablecoins + payment networks' will take center stage.
Ripple made an acquisition offer to Circle, which seems like a buyout deal but reflects the maturity of the stablecoin ecosystem and the blurred boundaries between crypto-native innovation and institutional adoption, further reflecting the importance of strategic consistency when traditional finance meets crypto finance.
