AI Could Make Stablecoins the New Backbone of Global Finance

Michael Novogratz, a prominent figure in the cryptocurrency industry, has made a bold prediction that artificial intelligence (AI) will dominate the use of stablecoins in the near future. This assertion aligns with broader trends in the financial technology landscape, where stablecoins—digital currencies pegged to traditional fiat currencies—are increasingly viewed as a bridge between the volatile world of cryptocurrencies and the more predictable realm of conventional finance. According to recent data, the total market capitalization of stablecoins has surged to $250 billion, more than doubling in the past 18 months, with industry forecasts projecting it to reach up to $2 trillion by 2028 [2].

Stablecoins function by maintaining a stable value through mechanisms such as collateralization, typically backed by assets like cash or highly liquid securities. For example, Circle’s USDC is supported by about 90 percent short-term U.S. Treasuries or repurchase agreements, with the remainder held in cash. This ensures that stablecoin holders can redeem their tokens at any time for their underlying asset. The rapid adoption of stablecoins is being driven by their utility in facilitating fast, secure, and low-cost transactions, especially in cross-border payments and remittances [2].

The integration of AI into stablecoin use, as Novogratz suggests, could further enhance the efficiency and reliability of these digital assets. AI's ability to process vast amounts of data and execute complex algorithms in real time can optimize aspects such as smart contracts, automated compliance checks, and fraud detection. This could reduce operational costs and increase the speed of transactions, making stablecoins more attractive for both institutional and retail users. In fact, technological advancements in blockchain and smart contract platforms have already improved the performance of stablecoin ecosystems, enabling faster consensus mechanisms and more sophisticated on-chain analytics [2].

The rise of stablecoins has also prompted regulatory bodies to take notice. In 2023, the European Union introduced the Regulation on Markets in Crypto-Assets (MiCA), while similar measures have been enacted in Hong Kong, Japan, and Singapore. In the United States, the Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025, which imposes conditions for reserves, stability, and oversight. These regulatory developments reflect a growing recognition of the systemic importance of stablecoins in global finance and aim to ensure their secure and transparent operation [2].

Despite the regulatory challenges, major financial institutions are actively exploring the potential of stablecoins. JPMorgan Chase, for instance, has developed the JPM Coin to facilitate real-time, on-chain settlement between institutional clients. Other institutions, such as Citibank, Goldman Sachs, and UBS, are also experimenting with tokenized deposits and cash through initiatives like the Canton Network. These efforts indicate a growing interest in leveraging stablecoins for a range of financial applications, including treasury management, capital-market settlement, and cross-border payments [2]. As the ecosystem continues to evolve, financial institutions are advised to prepare for the future by acquiring the necessary technological capabilities and engaging with regulators to stay informed about evolving requirements.

In conclusion, the convergence of AI and stablecoins is expected to reshape the financial landscape, offering new opportunities for innovation and efficiency. As stablecoins continue to gain traction, their integration with advanced technologies like AI will likely play a pivotal role in their widespread adoption and application in various sectors of the economy [1].

Source: [1] Crypto, Stablecoins, and the Rise of Tokenization (https://conversableeconomist.com/2025/09/02/crypto-stablecoins-and-the-rise-of-tokenization/) [2] What is a stablecoin? (https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-a-stablecoin)