Onigiri Weekend Digest: Institutional Lens #45

🌐 Website | 💼 Linkedln | 📰 Past Editions

Happy weekend from Onigiri!

This week, stablecoin competition moved beyond market capitalization and transaction volume into two less visible—but increasingly important—arenas: intellectual property and payment infrastructure.

Recap on the two headliners this week:

SS #121 - Circle Acquires IBM Patents

SS #122 - Payment Giants Double Down on Stablecoins

Circle acquired IBM’s blockchain patent portfolio, gaining control of more than 680 patent families and nearly 1,000 issued patents. The acquisition strengthens Circle’s position not merely as the issuer of USDC, but as an infrastructure company seeking greater control over the technologies underlying blockchain-based financial services.

At the same time, Visa and PayPal used their latest earnings calls to position stablecoins alongside artificial intelligence as foundational components of future commerce. Their message was increasingly clear: stablecoins are becoming the settlement infrastructure, while AI may become the interface through which payments are initiated, routed and managed.

Together, the developments suggest that the next phase of the stablecoin market will not be determined solely by which token has the largest supply. It will be shaped by who controls the patents, integrations, merchant relationships, compliance frameworks and settlement networks surrounding the token. 

Enjoy the read!

You read and share. We listen and improve. Send us feedback at [email protected].

🍙 Onigiri Take

The stablecoin market is entering a phase of vertical consolidation.

Historically, issuers competed primarily through liquidity, exchange integrations, reserve credibility and access to banking partners. Those factors remain important, but they are no longer sufficient to create lasting differentiation. As issuing a compliant stablecoin becomes increasingly standardized, competitive advantage is moving toward the surrounding infrastructure.

Circle’s acquisition of IBM’s blockchain patents reflects this shift. The portfolio may provide defensive protection for USDC, the Circle Payments Network and Circle’s Arc blockchain, while also giving Circle potential leverage over competitors building similar financial infrastructure.

The immediate economic value of these patents is difficult to quantify. Patents do not automatically create distribution, transaction volume or revenue. However, they can raise the legal and commercial cost of replicating certain products, strengthen negotiating positions in partnerships and provide optionality for future licensing.

Visa and PayPal are approaching the same strategic question from the opposite direction. Rather than beginning with a stablecoin and building distribution around it, they already control extensive payment networks and merchant relationships. Their objective is to integrate stablecoins into existing infrastructure before alternative networks disintermediate them.

This creates a convergence between stablecoin issuers and traditional payment companies:

• Issuers are expanding into networks, protocols and proprietary technology.

• Payment companies are expanding into issuance, tokenized deposits and blockchain settlement.

• Technology platforms are preparing for AI agents to initiate and execute transactions.

• Banks are evaluating where regulated deposits remain differentiated from stablecoins.

The emerging battleground is therefore not simply stablecoin issuance. It is control over the full payment lifecycle—from the user or AI interface, through orchestration and compliance, to final settlement.

🍙 Winners & Losers: Institutional Outlook

🍙 Under the Hood: From Token Issuance to Infrastructure Ownership

Circle’s acquisition of IBM’s blockchain patent portfolio is significant because it expands Circle’s competitive strategy beyond USDC distribution. With USDC supply exceeding $74 billion as of July 27, Circle already operates one of the largest regulated stablecoin networks. The patent portfolio potentially strengthens three areas of its ecosystem:

1. USDC: Patents covering blockchain payments, banking and financial services may help protect elements of Circle’s issuance and settlement architecture.

2. Circle Payments Network: Intellectual property could strengthen Circle’s position as it connects financial institutions and payment providers through stablecoin-based settlement.

3. Arc blockchain: Owning foundational patents may give Circle greater flexibility as it builds proprietary blockchain infrastructure and attracts institutional applications.

On the other hand, Visa and PayPal are building from their existing strengths: distribution, merchants and global payment connectivity.

• Visa’s involvement in the OpenStandard consortium and OpenUSD suggests it does not want stablecoin issuance to remain exclusively controlled by crypto-native firms. Its integration with Pismo also points toward a broader architecture in which stablecoins, tokenized deposits and conventional account infrastructure coexist within the same payment network.

• PayPal is pursuing a similar convergence through PYUSD, PayPal World and agentic payments. Its approximately $200 million in PayPal World volume remains small relative to its overall payment business, but the strategic direction is more important than the current scale.

However, neither Visa nor PayPal has yet demonstrated a fully developed agentic-commerce model at meaningful scale. For now, the market is receiving strategic positioning rather than a clearly proven product.

🍙Stablecoin ≠ Crypto —  It Is Becoming the Settlement Layer for Machine Commerce

Stablecoins are increasingly separating from the speculative identity of the broader crypto market. The strongest evidence is not token-price activity. It is the behaviour of established payment companies.

Visa and PayPal are not approaching stablecoins primarily as investment products. They are evaluating them as infrastructure capable of supporting faster settlement, cross-border payments, tokenized deposits and automated commerce.

This distinction becomes more important as AI agents begin participating in economic activity.

Traditional payment systems were designed around human users, banking hours, card credentials and institution-specific messaging. Agentic commerce may require a different architecture: continuous settlement, programmable permissions, machine-readable balances and the ability to execute low-value transactions across multiple platforms.

Stablecoins can serve this function, but only when paired with several additional layers:

• identity and authorization;

• transaction limits and programmable controls;

• compliance and sanctions screening;

• dispute-management mechanisms;

• liquidity and foreign-exchange routing;

• merchant acceptance and accounting integration.

The stablecoin itself is therefore only one component. The more valuable layer may ultimately be the operating system that determines when, where and under what conditions stablecoins move.

This is why Circle is accumulating intellectual property, Visa is participating in issuance consortiums and PayPal is building agentic-payment capabilities. Each is attempting to control a different part of the same future transaction stack.

🍙 Institutional Risks & Unknowns

1. Patent Strategy and Litigation Risk: Circle has not clarified whether the patents will be used defensively or actively enforced. Their strategic value will depend on validity, remaining duration and relevance to modern blockchain infrastructure.

2. Infrastructure Concentration: Greater concentration among major issuers, payment networks and banking partners may improve standardization but also create systemic dependencies and single points of failure.

3. Stablecoins Versus Tokenized Deposits: Stablecoins may dominate open, cross-border settlement, while tokenized deposits remain preferred for bank-led activity. How the two systems interoperate remains uncertain.

4. Agentic-Payment Liability: AI-driven payments raise unresolved questions around consent, fraud, errors and accountability across users, AI providers, wallets, merchants and payment networks.

5. Merchant Adoption: Institutional interest does not guarantee merchant adoption. Usage will depend on whether stablecoins deliver clear advantages in cost, settlement speed, refunds and integration.

6. Consortium Governance: Consortium-issued stablecoins may reduce reliance on a single issuer but introduce complexity around reserves, economics, compliance, upgrades and decision-making.

Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.

If you'd like to discuss or contribute to the next Institutional Lens, contact us at [email protected]

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.