Recently, it was revealed that Circle, the company behind the USDC stablecoin, rejected a $5 billion acquisition offer from Ripple. This article explores the reasons for Circle's decision.
Ripple's Offer Viewed as Lowball
While Ripple's offer may seem substantial, Circle considers it low. Previously, Circle attempted to go public with a $9 billion evaluation, and despite that plan falling through, USDC's market continues to grow, with the company's annual revenue reaching $1.68 billion. Given a current valuation of USDC at $61.5 billion, Ripple's offer was valued roughly at three times their revenue.
IPO Strategy
Circle has already filed for an IPO on the New York Stock Exchange, reflecting a commitment to transparency and stability. This indicates that Circle is not merely aiming for a short-term payout, but rather looking at long-term growth and sustainability. As a public company, Circle would adhere to strict reporting standards, thereby strengthening its credibility among partners.
Importance of Strategic Independence
Circle values its strategic independence as USDC operates across multiple blockchains and interacts with a wide range of financial institutions. Accepting Ripple's offer could jeopardize this independence and complicate relationships with key partners. Circle understands that maintaining its image and autonomous management is crucial for future success.
While rejecting Ripple's proposal may appear risky, it demonstrates confidence in their business model and long-term vision. The company aims to maintain independence and develop USDC as a cornerstone of the digital finance ecosystem.
