Circle, the company behind the USDC stablecoin, is pushing to go public through an IPO. But there are speculations that Circle has also talked with Coinbase and Ripple about selling the company.
According to new report from Fortune, these informal conversations took place recently. In early April, Circle filed paperwork to launch its long-awaited IPO. The company is aiming for a $5 billion valuation. However, sources say the sale talks could change everything. “If Coinbase wanted to buy them, Circle would sell in a heartbeat,” one banker said.
While the IPO process is still ongoing, the company hasn’t announced any terms or started a roadshow. That leaves room for a possible acquisition before it hits the public market. Coinbase already has close business ties with Circle.
The two companies created USDC together back in 2018 through a joint venture called Centre Consortium. That partnership officially ended in 2023, but the business connection remained strong.
Coinbase owns a piece of Circle and continues to share in the revenue generated from USDC reserves. A filing shows both companies get 50% of the revenue unless USDC is stored on Coinbase’s platform, where Coinbase keeps all of it. That arrangement has helped Coinbase’s earnings in recent months.
The agreement also gives Coinbase the right to block any new deals Circle wants to make involving USDC revenue. Coinbase also has some control over Circle’s intellectual property if the company ever goes bankrupt. “I feel like they’re one company,” another source said.
Ripple has also shown interest. It reportedly offered to buy Circle for $4 to $5 billion, but Circle turned down the offer. Ripple’s offer was a mix of cash and XRP, its cryptocurrency.
Coinbase may have an edge as a public company with access to more funding options. Its CEO Brian Armstrong, told Bloomberg on May 14, “They’re going public doesn’t change anything about our commercial relationship… nothing to announce today.” Coinbase had $8 billion in cash at the end of March and is joining the S&P 500 on May 19.
The recent successful IPO of eToro has made the market more attractive again. One investor said it’s still early to tell how new listings will perform, but it could give Circle more confidence to go public. Still, with interest from Coinbase and Ripple, nothing is final yet.
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