Ripple’s overture toward Circle was not without logic. Ripple, once hailed as a blockchain pioneer for cross-border payments, has seen its influence dim in the shadow of newer decentralized ecosystems. Its native token XRP, while still valuable by market cap, has largely retained relevance due to speculative trading rather than broad-based utility or developer activity. With the launch of its RLUSD stablecoin in December 2024, which has a modest market cap of around US$317 million, Ripple is attempting to re-establish itself as a serious player in digital payments.

Circle, on the other hand, is the institutional poster child of stablecoins. USDC commands a US$61+ billion market cap, and Circle has earned the trust of financial giants like BlackRock and BNY Mellon, not only through partnerships but also with its focus on transparency, compliance, and reserve clarity. For Ripple, acquiring Circle would be a shortcut to stablecoin relevance and institutional validation, essentially leapfrogging years of development and trust-building.

Yet Circle rejected the bid outright, and rightly so. Several factors contributed to the decision:

1. Valuation Mismatch: Ripple’s offer of US$4–5 billion significantly undervalued Circle. The company previously aimed for a US$9 billion valuation via SPAC in 2022, and while market conditions have shifted, Circle’s financials are still strong, with US$1.67 billion in revenue in 2024. The offered multiple was barely 3x revenue; low for a high-growth fintech on the cusp of IPO.
2. IPO Ambitions: Circle is pursuing a public listing on the NYSE, with major banks like JPMorgan Chase and Citi backing the effort. An IPO offers Circle regulatory clarity, long-term capital access, and a brand-building opportunity – none of which a Ripple acquisition could match, especially if XRP tokens were part of the purchase currency.
3. Strategic Autonomy: USDC’s strength lies in its neutrality. It operates across multiple chains and is embedded in a variety of financial ecosystems. Handing control to Ripple, whose RLUSD competes directly and whose institutional relationships are less diversified, would compromise Circle’s strategic flexibility and potentially alienate key partners.
4. Reputation Risk: Ripple’s ongoing baggage, including its past battles with the SEC and the speculative nature of XRP, stands in stark contrast to Circle’s regulatory-first narrative. Institutional partners trust Circle’s clean, transparent books, an image that could be tainted under Ripple’s ownership.

Ripple’s broader strategy, fresh off a US$1.25 billion acquisition of Hidden Road, a prime brokerage firm, is increasingly centered on using its war chest of XRP tokens to buy its way into relevance. With 4.5 billion XRP held directly (worth about US$10 billion) and another 38 billion in escrow, Ripple has capital, at least on paper. But this approach carries risk. Offloading large amounts of XRP could destabilize its value, and using it as an acquisition currency poses trust issues for sellers who would be exposed to token volatility.

This model of acquisition-led growth raises a fundamental question: is Ripple building a cohesive financial empire, or merely plugging holes in a slowly eroding narrative of utility?

Ripple’s failed bid for Circle underscores a larger tension in the crypto world: the battle between speculative legacy giants trying to pivot toward legitimacy and next-gen fintechs built from the ground up with compliance, transparency, and long-term growth in mind.

Circle’s decision signals that the age of “just throw billions of tokens at the problem” may be nearing its end. Institutional capital, and the future of digital finance, now favors companies with grounded operations, strategic independence, and regulatory credibility.

Ripple may yet revise its offer, but unless it is prepared to address these core misalignments, another rejection seems inevitable. And that may be for the best, not just for Circle, but for the maturing industry as a whole.