Ripple’s Potential Circle Acquisition Could Shift Power in Stablecoins—and Sideline XRP

Ripple is pushing to acquire Circle, the issuer of the USDC stablecoin, with a new proposed offer reaching up to $11 billion.

However, the community is concerned that this deal could lead to negative consequences, from market panic to undermining XRP’s role. So why is Ripple determined to buy Circle, and what does this mean for the crypto market?

Why is Ripple Acquiring Circle?

Ripple, the company behind XRP, has long positioned itself as a solution for cross-border payments, aiming to replace traditional systems like SWIFT. However, the rapid rise of stablecoins, including USDC, and their promising future have overshadowed XRP’s role.

“They are trying to buy Circle because stablecoins make the usecase XRP was supposed to fulfil utterly useless,” X user R89Capital commented.

This user also suggested that Ripple’s willingness to spend heavily on Circle stems from having “dumped billions of dollars worth of XRP on retail,” referencing the prolonged Ripple-SEC lawsuit. This view has garnered agreement from many other X users.

“There has never been a bigger grift in crypto than Ripple. It’s one of the largest frauds in the history of finance,” R89Capital added.

The argument that USDC could render XRP obsolete is based on stablecoins’ price stability and widespread adoption by traditional financial institutions (TradFi). With a market cap of $61 billion, USDC is not just a stablecoin but a bridge between traditional finance and blockchain, backed by major organizations.

In this context, acquiring Circle for up to $11 billion could allow Ripple to leverage USDC’s position rather than continue competing against it. Additionally, owning USDC could strengthen Ripple’s standing in the digital finance space. The company has also made a number of acquisitions recently. Recently, Ripple launched its own stablecoin, RLUSD, with a $310 million market cap, but this pales in comparison to USDC.

Acquiring Circle would enable Ripple to integrate USDC into its ecosystem, leveraging Circle’s relationships with major financial institutions to expand market share. This move could also reduce Ripple’s reliance on XRP, which faces fierce competition from stablecoins and other payment solutions.

Benefits and Risks

However, the crypto community has expressed deep concerns about the deal. X user GwartyGwart likened Ripple’s acquisition of Circle to “Hooli buying Pied Piper,” suggesting potential negative consequences akin to those in the TV series Silicon Valley.

Meanwhile, X user 0xShual warned that the deal could trigger “mass panic” in the market, as Ripple’s control over USDC might centralize power and undermine the decentralized nature of the stablecoin ecosystem. If Ripple controls USDC, the community fears it could prioritize its own interests, harming the transparency and trust that USDC has built.

Despite these concerns, the deal presents opportunities for Ripple. If the acquisition succeeds, Ripple could become a major player in the stablecoin market, competing with rivals like Tether (USDT).

However, with Circle’s initial rejection and pressure from competitors like Coinbase, Ripple faces significant challenges in completing the deal. In the current crypto market, the Ripple-Circle acquisition is a strategic move and a test of Ripple’s ambition to reshape the future of digital finance.