AI agents may become liquidity drivers for stablecoins, says Paxos Labs co-founder

As stablecoins pass $300 billion market cap, Paxos Labs’ Bhau Kotecha says AI agents could turn market fragmentation into an advantage by routing liquidity to top issuers.

The next wave of stablecoin adoption may not be led by people at all. Paxos Labs’ co-founder says AI agents could become the “X-factor,” instantly shifting liquidity to the most efficient issuers and turning market fragmentation into an advantage.

With clearer regulations around stablecoins passing in the United States, the stablecoin market has surged past $300 billion, becoming one of crypto’s central narratives. However, fragmentation across issuers and jurisdictions remains a challenge. 

As new entrants join an increasingly diverse field — from dollar-backed leaders like Tether and Circle, to synthetic assets like Athena, and PayPal’s PYUSD, which targets consumer payments — questions have arisen over whether fragmentation could pose a problem to the industry.

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