As the U.S. Senate passed the discussion closure for the stablecoin regulation bill 'GENIUS', USDC emerged as the biggest beneficiary asset. With the full-scale acquisition battle between Ripple and Coinbase surrounding Circle's company, Circle's valuation has doubled in just a month.
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Ripple Raises Acquisition Offer to Double in a Month... Maximum of $11 Billion
According to the cryptocurrency specialized media Paul Baron Network on the 21st, Ripple recently proposed an acquisition offer for Circle between $9 billion and $11 billion. This is approximately 15 trillion won in Korean currency. Circle is known to have applied for an Initial Public Offering (IPO) to the U.S. Securities and Exchange Commission last month while conducting unofficial sale negotiations with both Ripple and Coinbase.
According to Bloomberg, Ripple previously made a first acquisition proposal of $4 billion to $5 billion. However, Circle rejected this, claiming the company's valuation was low. After Ripple adjusted the proposal price to more than double, Circle's corporate value surged in just a month.
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U.S. GENIUS Bill Intensifies USDT Containment, Expecting Spillover Benefits
The background of the rapid valuation increase lies in the progress of the GENIUS bill. The bill passed the key legislative gateway by passing the discussion closure vote in the U.S. Senate on the 20th (local time). The bill stipulates that stablecoin issuers must maintain 100% reserves in highly liquid assets such as U.S. dollars or short-term government bonds. It also leaves the decision on the circulation of offshore-issued stablecoins in the U.S. to the discretion of the Treasury Secretary.
If the bill passes, USDT, which is headquartered in El Salvador and includes various assets like BTC, corporate bonds, and precious metals in its reserves, may find it difficult to enter the institutional market. There is a precedent where exchanges in Europe simultaneously delisted USDT after the implementation of the EU's cryptocurrency regulation law MiCA.
The industry interprets that while the GENIUS bill seems to regulate all stablecoins, it is essentially targeting USDT. An industry official said, "U.S. financial institutions are already adopting USDC with low regulatory risks" and "there is a high possibility that the center of the stablecoin market will naturally shift from USDT to USDC".
Currently, USDC is jointly issued by Coinbase and Circle. Coinbase, as a major shareholder of Circle, receives interest income on reserves, which is considered one of its primary revenue sources. As the largest U.S. cryptocurrency exchange, Coinbase is already using USDC as its base currency. If successful in the acquisition, USDC's institutional position is expected to become even more solid. Coinbase CEO Brian Armstrong recently suggested the possibility of delisting competing stablecoin USDT in an interview, further supporting USDC.
Ripple is actively pursuing the acquisition of Circle to increase the utility of its own cryptocurrency XRP. While XRP gained attention as a global remittance method due to low fees and fast speed, its position has weakened as the market shifted towards stablecoins. Ripple recently launched the dollar-based stablecoin 'RLUSD' and is pursuing an ecosystem integration strategy. However, there are assessments that with the stablecoin market solidified into a USDT and USDC duopoly, the market share expansion of the late entrant RLUSD has limitations.
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"Who Acquires Circle Will Determine the Stablecoin Order"
A domestic blockchain company Jangle evaluated that "this acquisition battle goes beyond simple inter-company competition and is a strategic collision to secure market dominance and financial infrastructure influence in the cryptocurrency industry." They added that "depending on who acquires Circle, it could be a critical turning point that determines the leadership of the future stablecoin order".
The industry believes that if Ripple acquires Circle, the combination with XRP will accelerate the spread of global remittance systems. Conversely, if Coinbase successfully acquires Circle, USDC is expected to establish itself as a U.S. institutional asset.
- Reporter Kim Jung-woo
- woo@sedaily.com
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