The Future of AI Economy: The Role of Blockchain Infrastructure

This week’s edition of Crypto Long & Short features insights on the intersection of artificial intelligence and blockchain technology.

Note: The opinions expressed in this column are solely those of the author and do not necessarily represent the views of CoinDesk, Inc., CoinDesk Indices or its affiliates.

Welcome to your Wednesday update on institutional crypto insights.

This week, we delve into:

• Utkarsh Ahuja from Moon Pursuit Capital discussing the financial infrastructure needed for an economy driven by autonomous AI agents.
• Key headlines relevant to institutional investors.
• “BP's rise coincides with Backpack's declining share of tokenized stock volume, shifting towards Robinhood and bStocks” in our Chart of the Week.

Thank you for tuning in!

- Kim Klemballa

Blockchain as a Foundation for the AI Economy

By Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital

The dialogue surrounding artificial intelligence has increasingly focused on which companies will emerge victorious in the market. Investors are keen to identify the next leading model or platform, prompting a significant influx of capital into those ventures. However, a crucial question remains largely unaddressed: if AI achieves the economic significance many anticipate, what kind of financial infrastructure will support this new economy?

It appears that blockchain technology and digital assets will play a pivotal role in this infrastructure. This does not imply that every AI firm must have its own token or that simply labeling a crypto project as “AI” will inherently increase its value. The more compelling opportunities lie at the intersection of both fields, where autonomous software engages with financial systems and necessitates infrastructure that can transfer value as seamlessly as it handles data.

We are approaching a reality where AI agents will not just generate content or analyze data; they will also negotiate with other agents, acquire computing resources, pay for data, carry out transactions, and manage financial choices based on parameters set by humans. Conventional payment systems were designed for human initiators and institutions, not for potentially millions of autonomous agents conducting numerous minor transactions across borders.

Blockchain technology is particularly well-equipped for this scenario, as it allows for programmable money. An AI agent can interact with a digital wallet, execute smart contracts, or transfer stablecoins without the extensive manual processes typical of traditional financial systems. Stablecoins are crucial in this context, as they bridge the gap between the programmability of blockchain and a familiar currency unit.

Investors should expand their perspective on the AI sector. The potential extends beyond merely investing in companies that develop AI models or applications. As AI spurs a surge in machine-to-machine economic interactions, there will be a growing need for the infrastructure that enables those machines to transact, verify identities, establish ownership, and exchange value.

Identity verification is a prime example. As autonomous agents enhance their capabilities, there will be an increasing requirement to ascertain who or what is behind a transaction and what actions an agent is authorized to perform. The same principle applies to provenance: as AI systems utilize data, generate intellectual property, or execute transactions, understanding the source of information and ownership becomes critical. While blockchains won’t resolve all these issues, their capacity to provide verifiable, shared records makes them essential components of the infrastructure.

Additionally, there is a noteworthy angle concerning capital markets that often goes unnoticed. Tokenization is already moving traditional assets onto blockchain platforms, while stablecoins have shown that significant financial activities can occur on-chain. Although these trends are currently evolving separately, their convergence could be transformative. An AI agent capable of market analysis but lacking efficient mechanisms to hold, trade, or settle assets is fundamentally constrained. When programmable intelligence meets programmable assets, the possibilities become much more intriguing.

For investors, this calls for careful consideration, as not every project linked to AI and crypto should automatically command a high valuation. Previous crypto cycles have demonstrated how narratives can rapidly overshadow fundamentals, and a similar risk is present with AI today. I advocate for focusing on infrastructure that addresses genuine challenges posed by increased automation: payments, settlements, identity verification, cybersecurity, custody, and the connections between traditional and digital markets.

My perspective is primarily shaped by my experiences as an investor and trader. I am particularly interested in areas where structural changes foster new capital flows and economic activity. AI is likely to be one of those transformative forces, but investors should not presume that all value will be found at the application level. Some of the most significant opportunities may arise from the financial infrastructure needed to sustain an increasingly autonomous economy.

The internet revolutionized information transfer, while blockchain has transformed value transfer. Now, AI is redefining who, or what, can make economic decisions. Investors should closely monitor the implications when these three shifts intersect.

Weekly Highlights

This week, traditional finance is increasingly integrating with crypto infrastructure from multiple angles. Goldman Sachs has directed roughly $100 billion from its Treasury fund to digital asset trading firms without tokenizing the funds, while Cboe Global Markets and S&P Dow Jones Indices are exploring the possibility of tokenized options through an extended licensing agreement.

• Goldman Sachs channels $100 billion Treasury fund into crypto's institutional framework: Goldman's FTIXX Treasury fund is accessing institutional crypto firms via Lynq, a settlement network utilized by digital asset companies, without being tokenized.
• Cboe and S&P Dow Jones Indices consider tokenized options: An extended licensing agreement suggests a move towards tokenized options products, indicating that blockchain instruments are edging closer to established derivatives markets.
• Buterin envisions a different Ethereum for 2030: In a post titled "The cryptographic world computer," Vitalik Buterin outlined a vision of pairing blockchain with cryptographic proofs and networks of computers operating externally.
• Bitcoin rebounds above $84,000 as Treasury yields stabilize: After dipping to $82,500 on Monday, Bitcoin climbed back to $84,000 overnight as yields settled following a brief spike in the 10-year Treasury yield to 5.2%. Spot bitcoin ETFs attracted $30 million on Tuesday, a modest but positive figure, especially compared to the $2.84 billion accumulated over the prior week.

Chart of the Week

BP rises while Backpack's share of tokenized stock volume declines in favor of Robinhood and bStocks

Tokenized equity flow in decentralized exchanges is consolidating towards bStocks and Robinhood, with Backpack's share dropping to around 2%. Meanwhile, BP's token has seen a price increase to approximately $1.35, as the market values it as the only licensed, tradable token proxy for this theme.

For more updates, visit coindesk.com for the latest crypto news and market insights from coindesk.com/institutions.

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7. 7Metaplanet directors respond to shareholder backlash over an executive payout plan4 hours ago
8. 8Live updates: Bitcoin fluctuates around $84,000 ahead of inflation data and Micron earnings4 hours ago
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Diversified RWA stablecoins maintain a 5-7% yield from real credit as crypto funding compresses to around 4%. GENIUS aims to enhance yield off-chain; the total addressable market is projected to grow to $4 billion in three years.