As we increasingly consider how AI will transform the global economy, analysts at research and brokerage firm Bernstein argue that crypto micropayments are required to avoid financial bottlenecks in the emerging industry.
The current global financial system is built on jurisdiction-specific networks that are interconnected through systems like SWIFT for bank-to-bank transfers and companies like Mastercard and Visa for cross-border transactions. However, to access this system, individuals and businesses must verify their identities to obtain bank accounts or credit cards. This presents an obvious challenge in how automated AI would participate, lacking the necessary identity documents.
While AI agents might be able to use bank accounts or credit cards authorized by humans or enterprises, this would limit the AI economy to certified AI agents under human ownership — restricting the possibility of a fully autonomous AI financial system and creating a more federated-like economy, Gautam Chhugani wrote in a note to clients on Friday.
The real bottleneck to the AI financial economy is the inability of the current financial system to handle micropayments efficiently, Chhugani argued. AI agents may need to make extremely small, frictionless payments, such as streaming money for consuming data or content. However, traditional systems’ high transaction costs due to the complexity of technology and human involvement make that uneconomical. To support the needs of an AI economy, the financial system would need to evolve to enable seamless, low-cost micropayments that align with the consumption patterns of AI agents, the analyst said. That’s where crypto comes in.
Machine-to-machine payments require identity verification, cross-border, permissionless micropayments with instant settlement and minimal costs, which align with AI consumption patterns, according to Chhugani. Cryptocurrency can address these needs by providing global, permissionless digital payments and enabling micro-transactions with near-instant settlement between machines, though they would still need to be seeded with funds.
AI agents, unable to open bank accounts, can instead use crypto wallets linked to a common ledger, processing payments down to the 16th decimal. Additionally, zero-knowledge proof technology can link AI agent identities to human or enterprise owners, and advances in blockchain scaling via Layer 2s and parallelization are reducing transaction costs, making micropayments increasingly feasible, Chhugani said.
Bitcoin vs. stablecoins
The Bernstein analyst highlighted the convergence between crypto and AI that is already underway at the Bitcoin mining infrastructure layer, as mining firms with several gigawatts of power access become increasingly attractive partners for AI data center operators. Core Scientific’s 12-year, $3.5 billion deal with AI Hyperscaler CoreWeave is one such example.
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While Chhugani said it would be interesting to see if any miners leveraged Layer 2 payments technology on Bitcoin via the Lightning Network, he argued that a greater opportunity for the permissionless AI economy lies in stablecoins.
Stablecoins have a circulating supply of more than $176 billion, according to The Block’s data dashboard, and an annualized settlement value of more than $7.5 trillion, per Bernstein’s data. They have already found success in facilitating crypto trading pairs, global cross-border payments and making a digital form of dollars more accessible to users in geographies with weaker fiat currencies, such as in Latin America.
However, stablecoins have struggled to gain traction in e-commerce and point-of-sale payments, Chhugani noted, creating an opportunity for AI agents to build a new commercial economy. This could give stablecoins “another shot at relevance in this domain” through innovation rather than trying to disrupt well-run incumbent payment systems, he said.
Integrating crypto wallets into large language models could be a great starting point, according to Chhugani — enabling AI agents to handle financial transactions for users through simple, natural language commands, recommending travel, finalizing bookings or even creating content and getting paid in digital dollars, for example.
“Crypto has a real opportunity to capture the AI payments pool, by allowing greater programmability and financial autonomy to AI agents,” the analyst concluded.
Gautam Chhugani maintains long positions in various cryptocurrencies.
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