Circle, the issuer of USDC, has acquired nearly 1,000 blockchain patents from IBM in a single deal. The acquisition gives Circle one of the largest patent portfolios in the crypto space. But IBM isn't walking away from stablecoins — it continues to back a rival to USDC.
The patent deal
The transaction closed this week, according to people familiar with the matter. Circle now holds patents covering everything from consensus mechanisms to cross-chain interoperability. The company said the portfolio will help it defend USDC against legal challenges and accelerate development of new features.
IBM had been collecting blockchain patents for years, filing hundreds of applications since 2015. Selling them to Circle lets IBM monetize that work while keeping a foot in the digital currency world through its own stablecoin project.
IBM's competing stablecoin
IBM has been working on a blockchain-based payment system that competes directly with USDC. The company hasn't disclosed details, but the project remains active. That means IBM is both a seller of IP to Circle and a backer of a product that could eat into USDC's market share.
The arrangement isn't unprecedented — tech companies often sell patents to rivals while continuing to develop competing products. But it does raise questions about how aggressively Circle will enforce its new patents against IBM's stablecoin if the two go head-to-head.
USDC is already the second-largest stablecoin by market cap, behind Tether. The patent acquisition gives Circle a legal moat that could deter new entrants and strengthen its position in regulatory discussions. IBM's continued support for a rival suggests the stablecoin wars are far from over.
Neither company has commented on whether the patent sale includes any licensing back to IBM. That detail could determine how much freedom IBM's stablecoin team actually has.
The deal is expected to close fully by the end of the month. Circle plans to integrate some of the patents into its settlement network by the fourth quarter.
