Circle Dismisses Reports Of Coinbase Talks, Focuses On IPO

Circle has rejected claims that it held informal talks about a possible acquisition by Coinbase or Ripple. The stablecoin issuer reiterated its commitment to going public, following a regulatory filing for an initial public offering (IPO ) last month.

According to rumors, the company reportedly explored a sale for at least $5billion. That amount aligns with valuations from JPMorgan and Citi, two banks working with Circle on its IPO.

Coinbase holds a minority stake in Circle and shares revenue from interest earned on reserves backing the USDC stablecoin. Ripple, which recently launched its own stablecoin called RLUSD, had shown interest in acquiring Circle. That offer, reportedly between $4bn and $5bn, was declined.

The company had previously abandoned a SPAC merger in 2021 but revived plans for a traditional IPO earlier this year. Circle’s discussions with Coinbase and Ripple took place as both firms ramp up their own acquisition strategies.

Ripple recently bought prime brokerage firm Hidden Road for $1.25bn, marking one of the largest deals in the digital asset sector. Coinbase announced a $2.9bn acquisition of crypto derivatives exchange Deribit to expand its reach beyond the US and strengthen its global derivatives business.

Earlier this year, Circle also completed its own acquisition of Hashnote, the firm behind USYC — a stablecoin product backed by tokenized US Treasuries.

Circle and Coinbase have strong ties

Circle and Coinbase have a long-standing relationship. In 2018, they co-founded the Centre Consortium to issue USDC. That partnership ended in 2023, with Circle taking over full governance of USDC and Coinbase receiving an equity stake in return. Despite the restructuring, the firms continue to split revenue from interest generated on USDC reserves.

According to Circle’s IPO filing, Coinbase receives half of that revenue — unless the USDC is held directly on Coinbase’s platform, where it then receives the full share. Coinbase has reported higher earnings from this arrangement in recent quarters, likely due to growing USDC usage.

The agreement between the two companies also gives Coinbase some control over Circle’s business decisions. For example, Circle must obtain Coinbase’s approval before entering third-party partnerships that impact USDC revenue. In the event of a bankruptcy, Coinbase also gains partial rights to Circle’s intellectual property.

These contractual ties, along with Coinbase’s financial interest in USDC, have fueled speculation that Coinbase would be the most logical buyer if Circle were ever sold. For now, however, the company is moving ahead with plans to go public.