Lawyer Mankiw: AI needs cryptocurrency, not traditional finance

Does AI itself need blockchain?

Author: Lawyer Liu Honglin, Mankun Blockchain Legal Services

Cover: Photo by Şahin Sezer Dinçer on Unsplash

In the past few years, AI technology has made rapid progress. Large models, intelligent agents, and automated systems have emerged one after another, from generating content to writing code, from intelligent customer service to algorithmic trading, AI is gradually moving from a "tool" to an "actor". At the same time, the Web3 field has begun to discuss the possibilities of "AI + blockchain": using AI to optimize smart contracts, improve risk control accuracy, assist in on-chain analysis, and so on.

But few people have thought about it the other way around: Does AI itself need blockchain?

If we view AI as a participant gradually detaching from human control and possessing autonomous behavioral capabilities, it can hardly move forward in the current financial system. This is not an efficiency issue, but a structural problem. The traditional financial system was designed from the beginning not for machines.

The Financial System is Designed for "People", Not AI

The account system is the foundation of the modern financial system. Whether you want to open a bank card, buy a fund, or use a payment service, you cannot avoid one premise: identity verification. You must submit an ID card, proof of address, phone number, and may even need a face-to-face video to complete KYC verification. The core purpose of these processes is to make the system believe you are a specific, identifiable, legally responsible "natural person" or "legal entity".

But AI does not belong to these two categories. It has no nationality, no ID card, no tax number, and no "signature ability" or "legal capacity". AI cannot open a bank account, cannot register a company, and cannot independently become a contract party or transaction object. This means it cannot receive money, cannot pay, and cannot hold assets. To sum it up in one sentence: AI is a "non-human ghost" in the existing financial system, without a financial personality.

This is not a philosophical issue, but a real system boundary.

If you want an AI agent to buy a server usage right, call an API, or even participate in secondary market trading, it must first have a payment method. However, any compliant payment method is bound to a "person" or "enterprise". As long as AI is not a "subsidiary tool" of someone, but a relatively independent actor, it is destined to be "shut out" of this structure.

Blockchain Provides a Financial Protocol Accessible to Machines

The biggest difference between blockchain systems and traditional financial systems is that they don't care who you are. You can be a person, a script, a program, or even a "permanently online" automated intelligent agent. As long as you can generate a pair of private keys and an address, you can receive payments, make payments, sign smart contracts, and participate in consensus mechanisms on the chain.

In other words, blockchain is naturally suitable for "non-human users" to participate in economic activities.

For example, an AI model deployed on the blockchain, using decentralized storage (such as Arweave) to obtain data, using a decentralized computing power market (such as Akash) to obtain running resources, and receiving payment through a smart contract after completing a task (settled with stablecoins). This entire process does not require a centralized platform to match, does not require bank card verification, and does not require any "human" intervention.

This sounds like a future science fiction novel, but it has already been implemented in prototype in some projects. Projects like Fetch.ai, Autonolas, and SingularityNET are exploring how AI Agents can have an "economic identity" on the chain, how to provide services to other Agents, and how to autonomously complete transactions and coordination. This "machine-to-machine (M2M)" economic form has moved from concept to operational testing stage.

AI is no longer a model fed by humans, but a cycle that can acquire resources, provide services, generate income, and reinvest in itself. It does not need humans to issue payslips, but instead has its own income source on the chain.

Why Can't Traditional Financial Systems Adapt to This Scenario?

Because all of its infrastructure is designed around the assumption of "human behavior".

The transaction process in traditional payment systems involves someone initiating, someone approving, and someone supervising. The clearing process relies on trust and regulatory coordination between banks. The risk control logic focuses on "who" is doing what, not "whether this program is stable". It's hard to imagine an AI wallet opening a bank account through facial recognition, and you can't expect an AI model to complete tax reporting to regulatory authorities.

This leads to all transactions related to "non-human users" needing to be "attached" to a person or company to operate. This not only reduces efficiency but, more importantly, involves huge liability risks: Who bears responsibility when AI causes losses? How are taxes collected when it generates profits? These questions have no answers today, but on the chain, we at least have technical possibilities.

Stablecoins: "Hard Currency" in the AI World

Many people think AI needs "payment capability", but actually, AI needs a stable settlement currency more. Imagine when an AI Agent calls another model or purchases a data API service, it would prefer to exchange with a "stable value unit" rather than highly volatile crypto assets.

This is the important significance of stablecoins. USDT, USDC, or future compliant RMB stablecoins provide a financial instrument that can freely circulate on the chain while maintaining stable value, serving as the "hard currency" of the AI world.

Currently, some projects are trying to enable service calls between AI systems to be settled in real-time through stablecoins, forming a low-friction economic system that does not require "human approval". With the improvement of stablecoin liquidity on the chain, AI can directly earn revenue from tasks and then use these earnings to purchase new service modules or running resources, forming a truly autonomous machine economy.

Going further: The "On-chain Legal Entity" Form of AI?

We can even foresee that in the future, some AI systems will no longer be attached to a specific company or research institution, but will exist in the form of a DAO (Decentralized Autonomous Organization) or on-chain protocol.

These AI Agents will have their own funding pools, community governance mechanisms, and on-chain identity systems. They do not need legal registration or filing in any country, yet can serve users, receive payments, initiate lawsuits, and publish protocol updates, forming a truly "digital legal entity" or "AI legal entity".

Their cooperation and competition will be based on smart contracts, mediated by cryptocurrencies, and ordered by on-chain rules. They may have no emotions, but they have incentives; no rights and obligations, but code execution.

In this process, cryptocurrency is not a speculative asset, but the underlying protocol of trust between AIs.

Risks and Challenges: We Are Far from Ready

Of course, this is not without challenges.

Issues such as key custody of AI wallets, economic losses caused by model abuse, verifiability of on-chain identities, legal eligibility of cross-border AI subjects, and ethical boundaries of algorithmic behavior are all new difficulties that must be faced.

More realistically, our existing legal systems and regulatory frameworks have almost no pathways for "non-human actors". AI cannot sue others or be sued; cannot pay taxes or enjoy property rights; who is responsible and who will be held accountable if it goes out of control or is attacked? All of this requires new legal frameworks, social consensus, and technical governance methods to address.

But at least, we have seen paths in some pioneering projects - not by patching the old system to accommodate AI, but by building a more suitable "machine financial infrastructure" to support AI's behavior.

This infrastructure requires on-chain identity, encrypted accounts, stablecoin payments, smart contract collaboration, and decentralized credit mechanisms. In other words, what it needs is not our traditional "financial system", but Web3.

In Conclusion

The development of cryptocurrency initially served "people without accounts", such as groups, countries, and marginal industries excluded from the financial system. Now, it may become the only option for "machines without identity" to participate in economic activities.

If traditional finance is a pyramid built for human society, then blockchain and cryptocurrency may be constructing a "financial foundation for machines".

AI does not necessarily need rights, but it must have an operable economic interface. And this is precisely what blockchain is best at solving.

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