To get an idea of how big of a deal AI-based trading could be for crypto, ask entrepreneurs and developers involved in digital assets, especially stablecoins. They will happily tell you that blockchain-based money is the natural fit, an essential element in the mix, and so on.
Their logic is simple. Over the past few years, stablecoins — mostly digital versions of the dollar on public blockchains like Ethereum — have begun eating into the global payments industry. And while they have proven to be faster and cheaper than traditional bank transfers, it is in the new world of autonomous, micro-transacting AI agents that they will shine.
At least that’s the view of companies like Circle Internet (CRCL), the creator of the second-largest stablecoin, and engineers at crypto exchange Coinbase (COIN), who have led the engineering of x402, a payment protocol designed for use by autonomous AI agents in a field that’s becoming known as agent finance.
Just as 24/7, frictionless, cross-border payment has been a growth area for stablecoins, agent trading has special requirements that the dollar-pegged tokens meet, according to Dante Disparte, Circle’s chief strategy officer and head of global policy. These include the ability to program the coins to be transferred only when specific conditions are met, and to chain or compound a set of actions that occur upon receipt of a token.
“First, you need to be able to take advantage of the otherwise really innocuous properties of stablecoins, which are programmability and composability,” Disparate said in an interview. “Number two, where the stablecoin lives, the physical blockchain ledgers themselves, is the common reference point the agents will turn to.”
However, the crypto industry is viewed with, if not suspicion, then at least concern among some AI developers. For example, Peter Steinberger, the creator of the AI agent OpenClaw, is publicly opposed to crypto, so much so that he refuses to participate in further comments on the subject and declined to comment on this article.
While crypto’s bullishness on AI is one end of the spectrum, consider the other side, said Sean Neville, co-founder of Catana Labs, a builder of agent finance infrastructure that last year raised $18 million in seed funding led by a16z.
“I’ve worked with people who are more in the AI developer and engineering community who have a very low opinion of crypto,” Neville, who also co-founded Circle, said in an interview. “I think stablecoins have achieved some escape velocity, but the AI developer community in particular has a negative view of crypto, because of things like memecoins and Ponzi schemes and what not.”
Untouched by human hands
A key feature of agent finance is that it involves microtransactions or nanopayments, some of which take place between AI agents with humans somewhere in the background.
This is quite different from using Chat GTP as a front-end for a shopping cart and putting a credit card into it, although in the short term agent systems will have access to both crypto and cards, Neville said. Agent payments are likely to be high-frequency transactions in fractions of a cent that credit card networks will struggle to handle.
“Over time, I think there are significant benefits to stablecoins and blockchain rails that are much more natural for agent flows beyond just the retail use case,” Neville said. “If AI is doing things like leveraging 24/7 programmable rails to stream different kinds of money around the world, across borders, it’s just hard to do that with anything other than stablecoins.”
With clear regulatory guidance for stablecoins to finally arrive in the US, there are potentially more pressing questions for AI agents around fragmentation and conflicting protocols jockeying for position, Neville said.
“There are a lot of different ways for agents to pay each other, but if they can’t all agree on how payments should work, then it’s hard to bootstrap marketplaces, whether they use micropayments or not,” he said. “I would love to see something like an SSL equivalent emerge for agents, and it would be great to see a standard that no one owns so we could all build on the same interoperable standard.”
SSL, or Secure Sockets Layer, is a standard technology that encrypts the connection between a web server and a browser.
Stablecoin-friendly option x402, often cited in the debate, has caused some people to get bogged down in the protocol’s month-to-month transaction volume, said Erik Reppel, head of engineering for the Coinbase Developer Platform and an x402 founder. He said his focus is firmly on looking ahead at an entire category of commerce that will massively disrupt the Internet’s existing advertising marketplace.
“I think what people haven’t quite realized is that we’re going to break the basic economic model of the Internet, and we’re moving from browsers and you visit the website of the person who publishes content to consuming things through your agents and your chat interface,” Reppel said in an interview.
The few cents paid by an agent crawling a website, equivalent to the value of an ad flashed before a human’s eyes, could in theory be made by spinning up a bunch of virtual cards if a developer has a relationship with, say, Visa, Rappel said.
“But anyone can program stablecoins,” he said. “Anyone in the world can collect as many wallets as they want and then just use wallets as the way to fully isolate funds to an agent. What we want is for agents to have isolated, programmable funds where your agent can’t spend within your credit card limit and can’t access your credit card.”
Catena’s Neville said the company is struggling to square regulated money transfer with a sea of agents and bots that have no financial identity. The goal is to keep the bad bots out, he said, while identifying and allowing the ones you want, while giving them specific guidelines and policies they can’t escape.
“The way to deal with it is programmable money because we can leverage cryptography to ensure verifiability and auditability and so on,” Neville said. “It’s actually identity and policy controls so that agents can operate within the rules regardless of what protocol or wallet or account infrastructure they happen to be using.”
