AI agents could become a leading factor in the next wave of stablecoin adoption, turning market fragmentation into an advantage, according to Bhav Kotecha, co-founder of Paxos.
The market capitalization of the segment recently surpassed $300 billion. However, the market is fragmented across jurisdictions and various models of pegged tokens, which issuers release based on their business needs. Alongside dominant USDT and USDC, the market also features synthetic USDe by Ethena and payment-focused PYUSD by PayPal.
Fragmentation poses risks of liquidity fragmentation and user confusion, which could hinder further stablecoin adoption, Kotecha acknowledged.
According to the expert, AI agents—autonomous software capable of making decisions and performing tasks like trading or transferring funds without human intervention—could solve this issue.
AI agents will be able to “instantly switch” between any stablecoin platforms, finding the most attractive economic conditions.
“This means that fragmentation is not necessarily a deterrent—it can become a market-level optimizer, where AI ensures liquidity flows to the most efficient issuers. Over time, this could lead to reduced fees and force providers to compete based on fundamental metrics,” Kotecha stated.
The Growing Role of AI Agents in Stablecoin Usage
Galaxy Digital CEO Mike Novogratz anticipates that “in the not-too-distant future, the largest user of stablecoins will be artificial intelligence.”
Users will be able to delegate their daily purchases and service payments to AI agents, with the software autonomously executing necessary transactions, the entrepreneur explained in an interview with Bloomberg.
He noted that artificial intelligence will not use banking or payment services but will rely on fiat-pegged tokens.
In September, Google launched an open-source protocol allowing AI applications to send and receive payments supported by stablecoins. The solution was implemented in partnership with the cryptocurrency exchange Coinbase.
Network service provider Cloudflare announced the release of the NET Dollar stablecoin. The asset will enable fully automated transactions without human involvement.
By 2030, all fiat currencies will be represented as stablecoins, predicted Tether co-founder Reeve Collins.