Enthusiasm for AI will drive greater adoption of stablecoins and other cryptoassets
As crypto continues to make headlines at the individual state level as well as the federal level, the race between crypto and AI for most mentions in financial media continues to volley back and forth depending on the week in question. Recently the spat between Elon Musk and Sam Altman made additional headlines as the two tech titans feuded publicly regarding the future of OpenAI, headlines connected to the potential investment into OpenAI by Softbank, as well as the idea of a purchase (to be led by Musk) of OpenAI for approximately $100 billion.
Crypto has also generated significant headlines in recent days, as Federal Reserve Chairman Jerome Powell (seemingly) backtracked on previous statements and actions related to crypto banking opportunities in testimony to Congressional leaders. At the same time, even more states have begun the process of introducing legislation to allow direct investment into bitcoin and other digital assets, with Wyoming continuing to forge ahead with efforts to issue a dollar-backed stable token maintaining positive momentum. Even as bitcoin and the concept of a digital asset stockpile move forward, stablecoins are also accelerating in terms of market capitalization, usage, and the education of policymakers and potential users alike.
In the midst of these market headlines, it would be easy to overlook a simple yet powerful truth about the future of AI, crypto, and how these industries will continue to evolve and influence each other over time. Let’s take a look at how (and why) stablecoins will play a critical role in the further development and integration of AI across businesses in the near to medium term.
Stablecoins Will Power Payments
As the adoption and understanding of the benefits of tokenized payments become better understood the appetite and investment into stablecoin payments has continued to increase. Privately issued stablecoins, by non-bank entities, are worth in excess of $200 billion dollars with the volume of transactions continuing to increase. TradFi institutions across the globe have developed and implemented blockchain-based solutions and token-based solutions for internal clients, with PayPal, Visa, and Mastercard embracing similar trends; PayPal has even issued a native stablecoin to facilitate stablecoin transactions even further.
Bitcoin and other more volatile cryptoassets, including the much-maligned memecoin space, generate headlines, but stablecoins reflect the best of both worlds for crypto transactions. The speed and efficiency of tokenized transactions, when coupled with the stability of stablecoins or stable tokens, present a business case that is difficult to argue against. Reinforced by the prioritization of dollar-backed stablecoins in the recent executive order issued by the White House and the landscape looks primed for a dynamic year for stablecoin adoption.
The importance of dollar-backed tokens and stablecoins, especially for payments, will only grow in importance as the digitization of transactions accelerates.
AI Requires Continuous Uptime
With the ability to operate continuously without holidays, time zone implications and becoming more widespread on a daily basis AI protocols are increasingly driving the business decision making process. Alongside these growing applications there has also been a simultaneous increase in demand for electricity; both of these developments are, in turn, creating a business use case for stablecoins to become increasingly integrated within business operations. Bot-to-bot payments make logical sense from two distinct avenues; distributed power generation as well as bot-to-bot applications.
For example, as the investments into decentralized and distributed applications continue to rise, micropayments will become more of an economic reality as bot-to-bot bookings, confirmations, and transaction run in the background of consumer facing applications. Streaming services and other on-demand products services will add further incentives for instantaneous (yet relatively small) exchanges of value to occur as these products and services are accessed. Power generation and distribution is also an area where the uptick in AI investment opens the door for micropayments to account for (and compensate) the miniscule and continuous adjustments made to production and transmission, and distribution functions.
Stablecoins deliver the benefits of tokenized transactions, are divisible enough to service micropayments, and are increasingly accepted by TradFi institutions.
Bot Payments Are Needed For Autonomous Applications
A facet of AI and stablecoins that remains on the back-burner for the time being is that in order to enable autonomous vehicles (for both individual and commercial use) AI will need to be the primary toll in governing these vehicles. While this might be a straight forward fact, the questions around compensation for the use of said vehicles, as well as the infrastructure to charge and otherwise support them, will need a medium of exchange that can be integrated with the speed of AI based transactions. In addition to the speed and traceability necessary to track and manage AI-driven vehicles, the data upon which these actions are taken must be seen as immutable.
Stablecoin payment channels and tracks provide a uniquely well positioned solution to these problems by enabling blockchain-based data to monitor activity of vehicles, allowing real-time interoperability between stablecoin payments and AI analyzed data, all while providing a stable medium of exchange that can be trusted, used as a store of value, and which will not lead to fluctuations in profitability.
Stablecoins continue to grow, and the uptick in AI adoption might provide an additional uptick for investment, adoption, and integration of crypto into mainstream business applications.
