Rumors Suggest Coinbase in Talks to Acquire Stablecoin Issuer Circle Ahead of Its Potential IPO

Rumors are swirling within the cryptocurrency space that major crypto exchange Coinbase may be on the verge of acquiring Circle, the issuer of the popular USDC stablecoin. This potential acquisition, reported by Fortune, comes at a pivotal time for Circle as it simultaneously prepares for an initial public offering (IPO). Such a move could significantly reshape the stablecoin landscape and have far-reaching implications for both companies and the broader crypto market.

The Shifting Sands of Stablecoin Ownership: Could Circle Be Acquired Despite IPO Plans?
The stablecoin issuer Circle, known for its USDC stablecoin, recently filed for an IPO in April. While it’s common knowledge that Ripple previously offered to acquire Circle for up to $5 billion but was rejected, fresh rumors of a Coinbase acquisition have once again put Circle in the spotlight.

Coinbase, which recently completed its $2.9 billion acquisition of derivatives platform Deribit, is reportedly still cash-rich with over $8 billion in cash and equivalents. According to a Fortune source, Circle would eagerly sell to Coinbase if the offer were made.

Coinbase’s interest in Circle isn’t surprising, given its existing equity stake and revenue-sharing partnership with the stablecoin issuer, where they split USDC proceeds. A significant portion of Coinbase’s Q1 “subscription and services” revenue, $698 million, came from USDC operations. Coinbase has also asserted its dominance in crypto mergers and acquisitions (M&A). During the company’s Q1 earnings call in early May, Coinbase President and COO Emilie Choi stated that she believed the company had historically been the most active player in crypto M&A.

Despite Circle’s public stance that it is “not for sale,” it appears that discussions have indeed occurred. Whether Circle proceeds with its IPO or is acquired beforehand remains uncertain, but if an acquisition were to happen, Coinbase is considered the most probable buyer. When asked about a potential transaction by Bloomberg, Coinbase CEO Brian Armstrong remarked that Circle’s decision to go public wouldn’t alter their commercial relationship, but any future deals would depend on both companies.

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