The plan to annex USDC has failed! Ripple's 5 billion investment was met with humiliation from Circle, and the stablecoin 'Godslayer War' has begun.

Author: Forbes

Reprint: Lawrence, Mars Finance

Why does Ripple want to acquire a stablecoin company?

Stablecoins require both scale and speed.

Ripple has reportedly acquired the stablecoin company Circle. At first glance, it doesn't seem like a typical acquisition deal, but for industry insiders familiar with Ripple's corporate strategy, acquiring Circle is actually "both unexpected and yet within reason."

In early April, Ripple acquired the brokerage firm Hidden Road for $1.25 billion and announced that it would use the RLUSD stablecoin as collateral for its main brokerage product, shifting its post-trade activities to the XRP Ledger blockchain. Ripple believes that this acquisition has the potential to optimize the cost and liquidity of its cross-border payment service, Ripple Payments, and provide custodial services for Hidden Road's clients.

It is worth mentioning that Hidden Road has successfully obtained a broker-dealer license, which means that this acquisition allows Ripple to gain legitimate access to traditional financial channels as an institution. XRP and RLUSD may evolve into liquidity bridge assets for institutional trade execution, repurchase financing, and even sovereign debt swaps, opening doors for tokenized government bonds, central bank digital currencies, and RWA.

Clearly, Ripple's "ambition" has surpassed the crypto realm, and its power tentacles are beginning to embed more deeply into traditional financial infrastructure, with stablecoins anchored to fiat currency undoubtedly being the best bridge connecting the crypto and traditional financial worlds.

In fact, as early as mid-2024, Ripple CEO Brad Garlinghouse confirmed the stablecoin strategy and announced the launch of the stablecoin RLUSD at the XRP Ledger community summit. After receiving approval from the New York Department of Financial Services (NYDFS), RLUSD officially went live at the end of last year, currently with a market capitalization of approximately $316.9 million, marking a good start.

However, for the current stablecoin market with a market capitalization close to $245 billion, the performance of RLUSD is rather tepid. If a "conservative" strategy is adopted, it seems difficult to keep up with rapidly developing competitors. Not to mention the USDT with a market capitalization approaching $149 billion, USDC with a market capitalization of about $61.5 billion, and even compared to USD1, which recently launched and quickly surpassed a market capitalization of $2 billion, RLUSD's advantages are also very minimal.

Therefore, Ripple's acquisition of Circle is not just about expansion, but also an acceleration strategy that allows it to achieve a competitive edge, enabling Ripple to quickly secure a place in the global stablecoin economy.

Will Circle say "Yes"?

From Circle's perspective, being acquired is not a bad thing.

First of all, the massive funds have enough attraction. Ripple's $5 billion acquisition offer is very appealing, and such a scale of injection could greatly accelerate Circle's global expansion. The additional funds could also drive deeper R&D, expanding Circle's partnerships, especially in markets where infrastructure and access are still being formed.

Secondly, the collaboration between Ripple and Circle may exhibit a "Win-Win" potential. Ripple brings extensive experience in navigating complex global regulations and a proven blockchain network, while Circle already possesses rich experience in stablecoin operations. The combination of the two could inspire the creation of entirely new financial products, such as tokenized payment systems, innovations in cross-border settlement, and hybrid DeFi/TradFi solutions.

We cannot forget the geographical advantages either; Ripple has a well-established international presence. Its network extends far beyond the borders of the United States, with strong relationships in Asia, Latin America, and Europe. 90% of Ripple's business is conducted outside the United States, and this influence could drive USDC into a rapidly growing market for stablecoin adoption that is still in its early stages.

Does Circle say "No"?

Although Ripple may reintroduce its acquisition offer, Circle has temporarily rejected the acquisition proposal on the grounds that the offer is too low. From the latest developments, Circle's decision may involve three reasons: valuation, vision, and regulation.

In terms of valuation, the current market capitalization of USDC is approaching $62 billion. Coupled with Circle's IPO plans in full swing, Ripple's acquisition offer at this point seems more like a form of "speculation." Circle is not a company seeking an exit, but rather is moving towards a broader future in the stablecoin market. The $5 billion acquisition may not only underestimate Circle's financial situation but also the strategic importance of USDC in the evolving digital dollar landscape.

Secondly, Circle has a clear vision, and merging with direct competitors may create friction. Although both Ripple and Circle operate in the stablecoin space, RLUSD and USDC are not completely aligned in terms of governance models, market strategies, etc. An acquisition could lead to a realignment of priorities, potentially undermining Circle's mission-driven approach to open financial systems.

Thirdly, the regulatory perspective cannot be ignored. The merger of two heavyweight companies in the crypto ecosystem will prompt stricter scrutiny from global regulatory bodies. Especially in the current environment—where U.S. lawmakers are actively defining the digital asset framework—this move could lead to significant operational slowdowns, legal complexities, and even potential pushback from certain jurisdictions.

What does Circle's decision mean for the market and stablecoins?

Circle's rejection of Ripple's acquisition is not just a story about price, but a signal of belief — that Circle believes its independent strategy is stronger than a quick acquisition. With the IPO progressing, Circle is trying to establish USDC as the global standard for dollar-backed stablecoins, doubling down on its reputation for transparency, compliance, and innovation.

At the same time, Ripple will not give up on the "big cake" of the stablecoin market. RLUSD is currently in the early stages of its lifecycle, but Ripple's actions indicate a long-term strategy aimed at integrating blockchain infrastructure with traditional finance. Whether through additional acquisitions, deeper ecosystem investments, or policy collaborations, Ripple will persist and fight for victory.

It can be said that stablecoins are no longer a simple cryptocurrency tool, but have quickly become a digital pipeline for global capital flow, a highly coveted power game—whoever controls the stablecoin standards, access, and integration points can shape the future of cross-border payments, institutional-level DeFi, and programmable finance.

Game of Thrones - Bigger than Circle and Ripple

For leaders in the fields of fintech, digital assets, and global payments: simply having market share is not enough to win the future; "winning" is about the coverage of the ecosystem, interoperability, and trust. The stablecoin race is far from over, and the true winners will be those who can innovate boldly while maintaining enough resilience to cope with regulation, market volatility, and global demand. Stablecoins are becoming the core pillar of the cryptocurrency ecosystem, and in the coming years, the integration, competition, and regulatory tussles surrounding "compliant stablecoins + payment networks" will become the main theme.

Ripple has made a takeover offer to Circle, which appears to be an acquisition deal, but reflects the maturity of the stablecoin ecosystem and the blurred boundaries between native cryptocurrency innovation and institutional adoption. It also reflects the importance of strategic consistency when traditional finance meets crypto finance.