AI and stablecoins: a pairing for a more intelligent era of online business

The rise of stablecoins in recent years has been nothing short of breathtaking. Since the start of 2020, these blockchain-native versions of fiat currencies have grown from $4 billion in circulation to nearly $200 billion. In November 2024 alone, USDC – a digital dollar issued by Circle – was used to settle $1 trillion in transactions.

While this immense increase in activity has occurred largely in parallel with the growth in digital asset markets, it also reflects a new paradigm of payment utility. Stablecoins traveling on open blockchain networks represent a massive upgrade compared to traditional means of settlement. The ability to send regulated digital dollars around the world – almost instantly, nearly for free, and without reliance on traditional intermediaries – is driving the emergence of a new internet financial system that we believe is poised to subsume a growing portion of traditional financial activity.

At the same time, the growth of artificial intelligence over the past few years has been equally stunning, especially in financial services. According to Nvidia, 43% of the respondents to their 2024 State of AI in Financial Services survey said their organizations are already using generative AI, with an additional 46% using large language models (LLMs). Broadly speaking, financial services businesses are embracing AI in a quest to operate more efficiently, quickly iterate on new products, and enhance the way they serve customers.

Much as we are seeing a convergence between the internet financial system and traditional ways of moving value, we are also seeing the rapid cross-pollination of stablecoins and AI. In many ways, these two seismic advances in technology work better together. Here is a look at how stablecoins and AI can dovetail to power faster, smarter payments that make global commerce better.

Let us start by exploring the advances made possible by blockchain networks. Typified by Solana and Base, the newest generation of blockchains make it possible to move financial value in the form of stablecoins at near-zero cost, in less than a second, to almost any business or individual recipient. This stands in stark contrast to the embedded costs and friction in the $150 trillion in annual cross-border payments that use traditional rails; intermediaries extract roughly $2.5 trillion in revenue from these flows, which acts as tax on global commerce.

In addition, blockchain networks offer previously unimaginable levels of automation and efficiency through programmable “smart contracts”, which make it possible to design self-executing transactions that automatically take place once pre-set “if/then” parameters are met. AI can analyze and respond to changing conditions in real time, allowing for automated adjustments and responses to these parameters.

In an age when corporate finance teams are well into their digital transformation journeys, this type of intelligent infrastructure offers immense opportunities to make operations faster and cheaper, while enhancing visibility. Global supplier flows and internal treasury management are among the areas that stand to benefit.

Insurance is another industry that is ripe for innovation. Parametric policies (which offer pre-determined payouts triggered by loss-making events) can be dynamically adjusted based on behaviour tracked in real-time by AI, and settled automatically using stablecoins. Certain blockchain networks are reshaping the industry’s expense structure, by making it cost-effective for insurers to write policies denominated in smaller amounts. This means farmers in emerging markets can take out climate insurance policies of as little as $50.

Lastly, in a world where more financial market activity migrates to the blockchain, regulators can leverage blockchain transparency and AI tools to potentially spot systemic risks before they reach a tipping point, while making it easier to monitor for fraud and abuse.

Microinsurance policies are just one example of how cost advantages of stablecoins and insights from AI are helping to create new, more intelligent markets. We also see significant opportunities to reshape how billions of people interact with the internet on a daily basis.

Consider that a significant portion of web content today lives behind paywalls, and many content apps require cumbersome account-registration processes. Using building blocks that exist today, it is possible to begin creating a new content economy where users access individual pieces on demand, and programmatically pay content creators via stablecoin for à la carte consumption.

Perhaps the most exciting advancement is the impending explosion of AI agents operating over the internet – completing complex tasks, conducting transactions, and collaborating with other AI agents for knowledge and services. This “agentic” economy will be built on blockchain intermediated value-exchange, with stablecoins used as the principal medium of exchange.

The convergence of AI and stablecoins is already starting to power an internet financial system that is more inclusive and efficient than traditional settlement. By embracing the synergy between AI and stablecoins, we can accelerate the evolution of global finance.