Why did Circle refuse Ripple's bold purchase of 5 billion USD?

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Ripple's $5 billion proposal rejected: Analyzing the reasons Circle said no

If Ripple owns USDC, it could stand out in the stablecoin market. However, Circle rejected Ripple's offer of 5 billion USD. After the deal fell through, the cryptocurrency community is buzzing.

1. Proposal for non-liquid shares

Circle is not happy with Ripple's pricing. Most of the $5 billion could be Ripple shares, which are currently private and difficult to assess. Circle, which is preparing for an IPO, does not want to trade futures for shares at an uncertain market value.

2. Ripple's competitive stablecoin

Ripple has announced RLUSD, operating on the XRP Ledger and Ethereum. Acquiring Circle could help eliminate direct competitors. However, Circle sees this as a move to undermine USDC, not wanting to give up its leading position in market acceptance and trust.

3. Strong position before Circle's IPO

Circle has strong investors like BlackRock and Fidelity, ready to IPO with a valuation of 5 billion USD. The price in the secondary market is high, and Circle does not see a demand to sell itself while their shares are still in high demand.

4. Regulatory and Market Advantages

Circle's USDC is widely accepted in the U.S. regulatory landscape and integrated with Visa, Stripe, and Robinhood. Ripple may acquire this entire system, but Circle does not want to compromise, especially not for equity from a rising competitor.

5. Strategic Disagreement

The proposal is not only related to competition but also to consolidation. Ripple wants to quickly dominate the stablecoin market through the network and reputation of USDC. However, Circle sees value in maintaining independence and is not willing to merge under Ripple's conditions.

In summary, Ripple aims high, but Circle is not prepared to be acquired.

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