Ripple's bid of $5 billion for the acquisition of Circle did not go as planned, unveiling an unexpected power play.

Source: Forbes

Compiled by: Moni, Odaily Planet Daily

Editor’s note: A significant piece of news has emerged in the stablecoin market — Ripple has made a $4-5 billion acquisition offer to its competitor, stablecoin provider Circle Internet Group, which is currently pursuing an IPO! Yes, you heard it right, it’s Ripple, which has just caused the U.S. Securities and Exchange Commission to drop its appeal and acknowledge that XRP is not a security. However, this offer was deemed too low and was rejected. It is reported that Ripple remains very interested in Circle but has not yet decided whether to make another offer.

Why is Ripple, a well-known company in the industry, attempting to acquire Circle at this point in 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 need both scale and speed.

Ripple has reportedly acquired the stablecoin company Circle. At first glance, it doesn't sound like a typical acquisition deal, but for those familiar with Ripple's corporate strategy, acquiring Circle is actually "both unexpected and expected."

In early April, Ripple acquired the brokerage firm Hidden Road for $1.25 billion and announced that it would use the RLUSD stablecoin as collateral for its main brokerage product, moving 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 broker-dealer license, which means that this acquisition allows Ripple to gain legitimate access to traditional financial rails as an institution. XRP and RLUSD may evolve into liquidity bridge assets for institutional trading execution, repurchase financing, and even sovereign debt swaps, opening the door for tokenized government bonds, central bank digital currencies, and RWA.

Clearly, Ripple's "ambition" has transcended the crypto realm, and its power tentacles have begun to penetrate deeper into traditional financial infrastructure, with stablecoins anchored to fiat currency undoubtedly being the best bridge between the crypto and traditional financial worlds.

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 receiving approval from the New York Department of Financial Services (NYDFS), RLUSD officially went live at the end of last year, currently with a market capitalization of approximately $316.9 million, marking a good start.

However, for the current stablecoin market with a market capitalization close to $245 billion, the performance of RLUSD is lukewarm. If a "conservative" strategy is adopted, it seems difficult to keep up with the 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 just launched and exceeded a market cap of $2 billion, RLUSD's advantages are also quite insignificant.

Therefore, Ripple's acquisition of Circle is not just about expansion, but also an acceleration strategy that allows it to overtake competitors on the curve, enabling 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 of all, the massive funding has enough appeal. Ripple's $5 billion acquisition offer is very attractive, and such an injection could significantly accelerate Circle's global expansion. The additional funds could also drive deeper R&D and expand Circle's partnerships, especially in markets where infrastructure and access are still developing.

Secondly, the collaboration between Ripple and Circle may unleash a "Win-Win" potential. Ripple brings a wealth of experience in navigating complex global regulations and a proven blockchain network, while Circle already has extensive experience in stablecoin operations. Combining the two could spark the creation of entirely new financial products, such as: tokenized payment systems, innovations in cross-border settlement, and hybrid DeFi/TradFi solutions.

We also cannot forget the geographical advantages, Ripple has a solid international footprint. Its network extends far beyond the borders of the United States, with strong ties in Asia, Latin America, and Europe. 90% of Ripple's business is conducted outside the United States, and this influence could help USDC enter a market for stablecoin adoption that is still in its infancy but growing rapidly.

Does Circle say "No"?

Although Ripple may revisit its acquisition offer, Circle has temporarily rejected the offer on the grounds that it is too low. From the latest developments, Circle's decision may involve three reasons: valuation, vision, and regulation.

In terms of valuation, the current market cap of USDC is approaching $62 billion, and with Circle's IPO plans in full swing, Ripple's acquisition proposal at this moment seems more like a "speculation". Circle is not a company seeking an exit, but rather advancing 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 landscape of digital dollars.

Secondly, Circle has a clear vision, and merging with direct competitors may create friction. While both Ripple and Circle operate in the stablecoin space, RLUSD and USDC are not entirely aligned in governance models, market strategies, and so on. An acquisition could lead to a realignment of priorities, potentially undermining Circle's mission-driven approach to open financial systems.

Thirdly, 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 the digital asset framework—this move could lead to severe operational slowdowns, legal complexities, and even possible pushback 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 attempting to establish USDC as the global standard for dollar-backed stablecoins, doubling down on its reputation for transparency, compliance, and innovation.

At the same time, 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 have rapidly become a digital conduit for global capital flow, a coveted power game—whoever controls the stablecoin standards, access, and integration points can shape the future of cross-border payments, institutional-grade DeFi, and programmable finance.

Game of Thrones - Bigger than Circle and Ripple

For leaders in fintech, digital assets, and global payments: relying solely on market share will not secure the future; "winning" is about the scope of ecosystem coverage, interoperability, and trust. The stablecoin race is far from over, and the true winners will be those who can innovate boldly while maintaining enough resilience to cope with regulation, market volatility, and global demand. Stablecoins are becoming the core pillar of the cryptocurrency ecosystem, and in the coming years, the integration, competition, and regulatory games surrounding "compliant stablecoins + payment networks" will become the main theme.

Ripple has made a takeover bid for Circle, which appears to be an acquisition deal, but reflects the maturity of the stablecoin ecosystem and the blurred lines between native crypto innovation and institutional adoption of stablecoins, further highlighting the importance of strategic consistency when traditional finance meets crypto finance.