According to Coinbase executive John D'Agostino, cryptocurrency is essential for AI agents to operate effectively within financial markets. D'Agostino, who is the head of institutional strategy at Coinbase, stated that traditional financial infrastructure is outdated and not designed for the speed and scalability required for AI agents.
The Need for Crypto in AI-Driven Finance
D'Agostino explained that AI agents need to operate on "true sources of information," emphasizing that it would be "disastrous if they didn't". He views blockchain, the technology underlying crypto, as an infinitely scalable source of truth, making it an ideal match for the infinitely scalable intelligence of AI. Traditional financial systems, according to D'Agostino, were not built for real-time, machine-to-machine transactions at scale, and using them for AI agents would be like "streaming a movie on a dial-up modem". He emphasized that AI agents require "infinitely fast and scalable money rails," which blockchain and crypto provide.
Agentic AI: A New Paradigm
Agentic AI refers to autonomous software agents that can perceive their environment, make decisions, and act towards specific goals. These agents can range from simple trading bots to more complex systems capable of managing resources, negotiating contracts, or coordinating distributed tasks. When integrated into digital systems, they can become persistent actors, managing crypto wallets, initiating smart contracts, acquiring computing power or data, and participating in on-chain governance.
Coinbase's Role in AI and Crypto Integration
Coinbase is actively involved in developing tools and infrastructure to support the convergence of AI and crypto. The company launched "Based Agent," a tool that allows users to create AI-powered agents in under three minutes. These agents can handle various blockchain tasks, such as trades, swaps, and staking. Coinbase is also part of the x402 Foundation, an initiative with CloudFlare to create standards for digital agents and AI systems to make payments through a shared format. The x402 protocol uses the HTTP "402 Payment Required" code to facilitate automated fund transfers, enabling AI agents to transact value and not just exchange information.
Use Cases and Significance
Agentic AI has several emerging use cases, particularly in decentralized finance (DeFi). AI agents can manage portfolios, rebalance liquidity, and execute arbitrage strategies using on-chain data and smart contracts. They can also govern autonomous treasuries or grant-making DAOs, acting continuously and adjusting to market changes in real-time without human intervention. Furthermore, AI agents can provide decentralized services like translation, content moderation, or API management, with smart contracts handling payments and access control.
Challenges and Opportunities
Despite the potential, the integration of AI agents in financial markets also presents challenges. David Duong, head of research at Coinbase, noted that investors still struggle to fully understand the potential of AI-powered agents. He emphasized that AI agents are not just simple bots but possess a high level of autonomy that could reshape DeFi. Brian Armstrong, CEO of Coinbase, highlighted the importance of transaction capabilities for AI agents, stating that they "cannot get bank accounts, but they can get crypto wallets". He also noted that AI agents can use stablecoins like USDC to transact with humans, merchants, or other AIs instantly and globally. James Ross, founder of Mode Network, predicts that AI agents could dominate the blockchain landscape, handling over 80% of all blockchain transactions within the next year. As AI and blockchain technologies advance, "agentic commerce" is expected to grow, creating a demand for efficient payment processing and driving the need for standards and protocols to govern AI agent interactions.
