Snippings

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The “how do agents pay” question remains unsolved, but several models are emerging: I think these loosely fall into four models of agentic commerce.

1. The Agent performs checkout with a human in the loop (e.g. ChatGPT asks you to add card info and click pay). 2. The Agent gets authority from a user to pay for multiple things (like card-on-file, and what Visa is doing with Intelligent Commerce) 3. The Agent has a limited ability to pay (like a virtual card or Visa’s intelligent commerce) 4. The Agent has its own wallet and funding (e.g., a stablecoin wallet)

From: (3) Apps are Dying. Agents are Buying. | LinkedIn.

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When ice was a luxurious novelty, its quality seemed to matter. Ice from Wenham Lake in Massachusetts came to be so famous for its crystalline purity that it was the only thing an English society hostess would think of using. “Everyone has the same everything in London,” William Makepeace Thackeray wrote mockingly in 1856. “You see the same coats, the same dinners, the same boiled fowls and mutton, the same cutlets, fish and cucumbers, the same lumps of Wenham Lake ice.”

From: The Ice King Was a Tudor – WSJ.

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While consumers own their data, that data is useless for most fintech purposes without the bank’s attestation. Data that is self-attested (coming directly from the consumer) would not meet the verification needs for a high-risk transaction like a payment. Banks have invested heavily in creating secure API layers to protect customer information and move away from risky methods, such as screen scraping. In my opinion, banks have every right to price their attestation services, just as consumers have the right to access their data.

From: APIs – More Banks to Follow JPM – Pricing Implications | Noyes Payments Blog.

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The American Fintech Council (AFC)

 

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JPM & AFC disagree on more topics with each deviating from Rule 1033 in some areas
JPM wants to charge Aggregators for access while the Aggregators want the data for free (Rule 1033 was on the AFC’s side)
JPM today limits access times and frequency to constrain capacity demands while the AFC wants no frequency limitations (Rule 1033 required “reasonable” constraints — with “reasonable” defined by consensus)
JPM wants to limit data use to the specific purposes authorized by the consumer while Fintechs want to use that data for other purposes (Rule 1033 is on JPM’s side)
JPM wants the AFC’s members to assume liability for data breaches and other bad outcomes while the AFC is silent on this issue
Rule 1033 left this issue open to a consensus process among all parties
The current bank contracts shift liability to the Fintechs & Aggregators

From: Is JPM’s data fee fair or unfair? – by Andrew M. Dresner.

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Fast-forwarding to today, the structural constraints that justified payment card consortiums simply do not exist with stablecoins.

Not Account-to-Account: Stablecoins are not an account-to-account service. Visa, MasterCard, and the more recent payment consortiums pursued by banks in the US, Zelle and RTP, operate on an account-to-account basis. Although such systems do not have to be operated on a consortium model (indeed, a consortium may be a constraint), some amount of cooperation among participants is essential.

No Regulatory Barriers to Nationwide Expansion: Federal and state chartered banks face few constraints on the ability to offer services nationwide. There may be some uncertainty about exactly how individual banks can support stablecoins—e.g., hold deposits from existing issuers, issue through such providers, or issue their own cousin. But banks are free to collaborate on those issues without jointly owning and operating any particular project

Technology Enables Different Scaling Models: Stablecoins are a native digital substitute for negotiable instruments. They can be accessed wherever the internet exists (and, under certain implementations, even where it does not). In the 1960s, banks needed to meet merchants in person to sign them to accept cards, and the underlying transaction records were entirely paper based. Blockchain infrastructure does not require the same physical network coordination.

Leveraging Existing Technology: Unlike the 1960s, when no national payment infrastructure existed, banks today can leverage existing stablecoin protocols and platforms without building from scratch.

Different Network Effects: Although stablecoins benefit from network effects, these operate differently than card networks. Token interoperability and protocol adoption do not require the same coordinated governance structures. Today’s existing stablecoin issuers—e.g., Circle, Tether, Paxos—do not need to coordinate with one another to offer stablecoins.

From: From Bank Cards to Stablecoins: Let’s Learn from History, not Repeat It.

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The GENIUS Act will fundamentally alter this dynamic. It will accelerate the use of stablecoins in a multitude of real economy use cases, sparking a fight for dominance among a new class of regulated issuers. In this new landscape, I believe US banks are best placed to capture and dominate existing payment flows (like trade finance and remittances) by integrating stablecoins into their current offerings. The more nimble, non bank issuers are set to lead the charge in the new, edge use cases where legacy systems do not exist.

From: Genius Law – What to Expect? | Noyes Payments Blog.

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One of the last places we might expect artificial intelligence to show up is the tattoo parlor, with its mix of artistry, personal expression and permanent ink. But a high-end ink shop in New York City is now taking appointments for an AI-driven tattoo robot.

From: Meet the Robot Using AI to Ink Your Next Tattoo – WSJ.

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Overshadowing CBDC projects is the experience of Nigeria. In 2021, it launched its own digital currency, but consumers largely shunned it, instead opting to buy privately issued dollar-backed stablecoins. The project’s failure led to the government cracking down on cryptocurrency exchanges.

The Nigeria experiment failed in part because the so-called e-naira was only a digital version of the underlying fiat currency, which was also not trusted by the public, said Nitin Datta, chief of staff at UNDCIF, a UN body for digital assets.

“Nigeria was an open market experiment,” he said. “Exchanges and stablecoins will have a role to play as you can’t shut out the market.”

From: Central banks face dilemma over rise of dollar-backed stablecoins.

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👉Key CBDC concepts that stablecoins ignore

🔹 CBCs are not standalone tools. To be effective and inclusive, CBCs should be viewed as one layer of a broader Digital Public Infrastructure (DPI) framework. DPI refers to foundational digital systems such as digital identity, interoperable payment systems, and consent-based data governance that enable societies to safely and inclusively participate in the digital economy. Examples include India’s India Stack and Brazil’s PIX.

🔹 Beyond conventional use cases such as retail payments and taxation, CBCs have significant potential to advance development outcomes, particularly in the areas of social protection, humanitarian assistance, and climate resilience. Their programmability, transparency, and traceability make them a compelling tool for disbursing Government-to-Person (G2P) payments and aid with greater efficiency and accountability.

🔹 Critical to the success of CBDCs is the ability to address foundational challenges, such as digital and financial literacy, infrastructure gaps, and the need for robust technology, regulation and governance arrangements such as privacy protections and cyber security mechanisms. Stakeholder collaboration across public and private sectors plays a pivotal role in ensuring that CBDC systems are scalable, adaptable, and aligned with global trends.

From: UNDP: CBDCs Boost Financial Inclusion, Why Stablecoins Fall Short.

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The UN Development Program (UNDP) looks at retail CBDCs and sees them as a means of overcoming the barriers to inclusion in emerging economies and an unprecedented opportunity to reshape the financial landscape. It says that

“CBDCs, if properly designed and managed, may have the potential to enhance financial inclusion by addressing access and price barriers. In terms of improving access to financial services, CBDCs can be designed to reduce identity management requirements (particularly Know Your Customer[KYC]) in low-risk contexts. This could allow the use of digital currencies without the need for bank accounts or minimum balances and offer offline functionality to mitigate the impact of physical remoteness.”

Note the emphasis on “reduced identity management requirements” due to the lack of personal identification and bank accounts. This is a key aspect for promoting CBDC adoption and can be custom-tailored on a national basis.