Circle is exploring potential acquisitions, primarily by Coinbase, according to Fortune. 

Circle Internet Financial, the issuer of USDC (USDC), is moving forward with its planned initial public offering. But behind the scenes, the stablecoin firm has engaged in informal sale talks with Coinbase and Ripple (XRP).

Circle is reportedly seeking a $5 billion valuation — either through public markets or acquisition, according to Fortune. 

Coinbase is the likely buyer

“If Coinbase wanted to buy them, Circle would sell in a heartbeat,” one banker said. While IPO plans remain intact, no terms or roadshow have been announced.

Coinbase may be the likeliest buyer. The two companies co-founded Centre Consortium in 2018 to issue USDC and still share revenue from reserve interest. 

Coinbase has favorable terms, including a 100% share of revenue from USDC held on its platform. It also holds influence over Circle’s partnership decisions and intellectual property rights.

Ripple has also shown interest, reportedly making an offer between $4 billion and $5 billion, though that bid was rejected. 

Ripple could leverage its large XRP reserves—worth more than $100 billion when including tokens in escrow—to fund a deal. 

But Coinbase, with $8 billion in cash and the ability to raise capital through public markets, remains a stronger financial contender. Coinbase CEO Brian Armstrong said on May 14 that Circle’s IPO doesn’t affect their commercial ties but hinted at openness to future deals, according to Fortune. 

Coinbase has ramped up M&A activity this year with acquisitions like Deribit and Spindle. Circle’s IPO hopes may be buoyed by eToro’s recent strong debut, but the possibility of a strategic sale remains in play.