Can Agentic Payments Save the Crypto Market?

Preface

Crypto sentiment is at a local minimum and CT is convinced it’s over. DeFi protocols are failing, companies are closing their doors, and VCs are pivoting to defense tech. What if I told you there is a glimmer of hope for your bags? Agentic payments onchain.

I know, it sounds boring. We went from making sound money the government couldn’t control to robot Venmo. If it saves our bags, maybe it’s a worthwhile sacrifice.

Expect to learn the bull and bear case for AI agents using crypto rails, who’s backing the agentic payment wave, and what it could mean for the crypto market.

 The Case for AI Onchain

Within 4 years, >95% of all AI queries will be from other AI.

You’ll have an AI agent that acts as your personal assistant. When you need a task done, it will prompt more specialized models to do the task and then give you the results. Say you wanted to evaluate Bitcoin as an investment. You ask your AI agent to write a report, and it goes out and asks a finance agent for its opinion on Bitcoin's financial metrics, a technical analysis agent for its opinion on the chart, and a copywriting agent to take this info and synthesize it nicely.

Only one problem: these agents won’t do it for free. They need a way to pay each other. It is illegal for an AI agent to own a credit card (but there are workarounds (more on that later)). You also wouldn’t want to give it your card in case it glitches and racks up a six-figure bill in compute fees.

Agents can own a crypto wallet. In this hypothetical scenario, you could give your agent $20 in crypto and it would find the best way to spend it with other agents.

AI already chunks data into tokens. In AI, tokens are a standard unit of information. The more complicated your question, the more tokens it uses. Given prices fluctuate with the cost of compute, it would make sense to put AI tokens onchain and let the free market dictate their price while simultaneously allowing agents to pay each other with compute tokens.

The Bear Case for Agentic Payments

There are two ways I could see crypto getting cut out of the mix.

1. Since AI agents already use tokens as a standard unit of compute, they could feasibly pay each other with these tokens without them having to go onchain. Most AI is centralized, and it would be easy to set up payment architecture for agents to pay each other using computational tokens. Then the user would only have to buy AI tokens and give them to their agent. 
   
   Obviously, this limits the agent's ability to transact outside of other agents. They couldn’t buy something for you on Amazon with AI tokens. Conversely, we aren’t far from big retailers accepting crypto.
    
2. Credit card companies create a non-crypto payment system for agents. The TradFi companies that are offsides on crypto payments have a vested interest in AI agents using traditional payment rails to transact with one another.

Solutions are already evolving to let AI agents use credit cards. For instance, Ramp now allows companies to issue agents virtual cards under the company's line of credit. The agent can buy things, and the responsibility falls on the company to pay and monitor transactions. Ramp agent cards allow companies to set strict guidelines to ensure the AI doesn’t get out of hand spending corporate money.

Expect more credit card companies to throw their hat in the agentic payments ring soon.

Who’s Backing Agentic Crypto Payments?

Coinbase created the x402 protocol, which allows agents to pay each other natively on the internet. This matters because it means agents can buy items for you online and purchase compute for themselves.

Stripe launched their Machine Payments Protocol (MPP) on TEMPO in March. MPP is targeted at agent-to-agent payments instead of agent-to-website payments (x402). MPP complements x402 well.

Circle is underpinning nanopayments. Nanopayments are microtransactions targeted at AI agents. They have no gas fees and can be as small as $0.000001.

MoonPay recently created the MoonAgents Card, which allows AI agents to spend crypto using a virtual debit card.

Will AI Payments Be Crypto’s Next PMF?

It depends on whether Stripe can get enough people onboard. They are battling enormous forces in the traditional payment processing industry, but out of all the companies on the crypto side, Stripe has the best chance.

Considering how much overlap there will be between AI agents, businesses, and humans transacting, it may come down to whether people can get onboard with using crypto as a currency.

 If you found this helpful, don't miss our latest article on two promising AI crypto projects that could follow in the footsteps of $VVV!