America's Talking - Circle May Have Missed Out by Rejecting Ripple’s Offer, Crypto Experts Say

Episode Date: May 9, 2025

(The Center Square) – The crypto company Ripple recently offered big money to purchase the company best known for issuing the USDC stablecoin. Ripple, best known for its XRP token, offered somewhere between $4 billion and $5 billion to take over Circle Internet Group Inc. However, its proposal was rejected by Circle, Bloomberg reports. The offer would have consolidated two prominent stablecoin companies had Circle accepted the deal. Although Ripple hasn't ruled out making another offer, the rejection baffled crypto experts. Some argue Circle will regret its decision.Support this podcast: https://secure.anedot.com/franklin-news-foundation/ce052532-b1e4-41c4-945c-d7ce2f52c38a?source_code=xxxxxxRead more: https://www.thecentersquare.com/national/article_1d3ff64f-f956-46e9-a4c6-55538463ec2a.html Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to America in Focus. I'm Eliana Kurnodal. The crypto company recently offered big money to purchase Circle Internet Group, Inc. Another major company in crypto. Joining me to dig into this is Chief Content Officer for the Center Square, Dan McAleb. Dan, can you tell us more about this deal and why it didn't go through? Yes, Eliana, but before we get to this specific deal, let me start with a little background on cryptocurrency. It's a complex topic, relatively new. new in the financial world. And many listeners might not be all that up to speed on it.

So let me give you some background here. Cryptocurrency is a form of a digital currency that's not tied to a central bank or governmental body. The first cryptocurrency launched in 2009, known as Bitcoin, which is sort of become a generic term for cryptocurrency overall. But it is a specific form of cryptocurrency. And while it was launched, launched in 2009, its roots go back years before then. But since Bitcoin was launched, the cryptocurrency market has exploded. There are now more than 25,000 forms of crypto in the market, more than 40% of which are valued at more than a billion dollars. Overall, cryptocurrency market capitalization is valued at more than $2.7 trillion. That's as of April and still growing.

Now, let me get back to your specific question there, Eliana. Ripple and Circle Interstellar Internet group are two of the larger crypto currency companies in the world. Ripple is best known for its XRP token, which was created to facilitate fast and efficient payments between parties, much faster than Bitcoin. XRP transactions can be completed in merely just a couple of seconds, and it's cheaper than traditional payment methods that often have fees attached to it. XRP tokens value can go up or down based on certain market fluctuations. Now, Circle's USDC stablecoin is directly tied to the U.S. dollar and is backed by cash,

meaning every USC token is worth one U.S. dollar. Stablecoin is a relatively numerous form of cryptocurrency, and because it's tied to the U.S. dollar, it's not meant to see the same market volatility as other cryptocurrency, but it still happened. Now, back to Ripple's attempt to purchase circle. Ripple offered somewhere between $4 billion and $5 billion to acquire Circle. It's been widely reported. But Circle really shocked many when it rejected the offer. Had Ripple acquired Circle, it would have owned the second largest stable coins,

and the assets of the combined two companies would have diversified their revenue streams. So some have pointed to the potential that a merger like this would have opened for these companies. what are some of those opportunities that they've highlighted? One was what I just mentioned there, that Ripple had it acquired Circle, it could have become the second largest owner of stable coins across the country. The other thing that has to do with it is Ripple is 90% of its business is overseas, meaning outside of the USA, because the stable coin, which circle circulates, is still relatively new, while it's growing rapidly, it varies. Its market share varies

depending on the region of the world you're talking about. Because Ripple, 90% of its market businesses overseas, it could have quickly expanded Circles currency in Europe, in Asia, and elsewhere. What are some of the other things that people are saying about this? Well, Circles rejection of Ripple's offer really stung. many crypto analysts who say it was a risky decision for a couple of reasons. Stable coins, which are circles digital currency, are relatively young and growing, as I said, and many believe that more mainstream banks and other financial companies will launch their own stable coins in the coming years, driving up competition.

Cryptocurrency is highly competitive already. As I said, there are already tens of thousands of types of crypto. If mainstream banks got involved, that competition will only grow. One analyst, David Towell, president of crypto hedge fund Pro Chain Capital, for example, he wrote that Circle was taking a lot of risk here because he expects just about every bank and tech company to launch stable coin commodity in the near future. He said, and this is a direct quote from him, the stable coin wars will be unleashed.

The second thing that those who are confused about why they've rejected the offer is the current market volatility. You know, amid President Donald Trump's on-again, off-again, reciprocal tariffs and trade negotiations with dozens of foreign countries, the markets have fluctuated greatly over the past couple of months. When Trump first announced Liberation Day in early April, stocks tanked for a week. Perhaps because of the negative market reaction

and concerns that Trump's reciprocal tariffs would drive up inflation, he paused the tariffs for 90 days, exactly one week after he launched them. President Trump himself says he paused the tariffs because dozens of foreign countries reached out to negotiate over them, so he wanted to give them time to make the best possible deals for both sides. But I'm sure the market reaction had to have been on his mind as well. President Trump says he's still negotiating with dozens of countries, but who knows what comes next? He very well could reimpose the tariffs, which could lead to further market volatility. Now, why does this matter to Circle? Because Circle is also in the midst of attempting

to go public for the second time since 2022. And going public with such market volatility is risky. In 2022, when Circle first attempted to go public, it collapsed when its proposed merger with Concord acquisition fell through. Well, Dan, thank you for your insights on the story. Listeners can keep up with this story and more at thecenter square.com.