Crypto Long & Short: AI-driven agents opting for decentralized currency

In this week’s Crypto Long & Short Newsletter, Sylvia To discusses AI agents opting for denationalized currency.

(Annie Spratt/ Unsplash+)

Key Points:

You are reading Crypto Long & Short, our weekly newsletter providing insights, updates, and analysis for professional investors. Subscribe here to receive it in your inbox every Wednesday.

Welcome to our institutional newsletter, Crypto Long & Short. In this edition:

• Sylvia To on AI agents selecting denationalized currency
• Important headlines for institutions to monitor by Francisco Rodrigues
• Kamino achieves $90M in OnRe liquidity, while $KMNO sees a 16% decrease in the Chart of the Week

We appreciate your readership!

-Alexandra Levis

Expert Insights

Hayek foresaw it, Satoshi created it, agents will utilize it: the covert denationalization of currency

– By Sylvia To, vice president, Bullish Capital Management

Although F.A. Hayek, Satoshi, and AI might appear to be three disparate subjects, the following moments will illustrate how essential this triad is to our financial independence, fundamentally altering your perspective on money as we understand it.

The ethos of crypto’s cypherpunk movement

Amidst the distractions of memecoins, speculation, and NFTs, Satoshi would urge us to remember the core ethos of crypto: privacy, decentralization, and resistance to censorship. These principles did not originate from central banks or policymakers but emerged from the cypherpunk definition that freedom is best defended not through persuasion, but through architectural design.

As Vitalik Buterin articulated in his March 2026 thread on X, this entails creating “sanctuary technologies” that foster “shared digital spaces with no owner,” facilitating “interdependence that cannot be weaponized” and promoting “de-totalization” to avert total control by any authority.

Currency should be a product, not a mandate

In 1976, Hayek contended that money should not be “legal tender” imposed on individuals by the state. It should be discovered, embraced, and discarded based on market preferences, similar to any other product. His work, Denationalisation of Money, articulated these attributes of “good money”:

•Non-state issuance: not mandated, not elected, not subject to bailouts.

•Rule-based monetary policy: predictable supply schedule, not subject to discretion.

•Global choice: adoption is voluntary; individuals can opt in or out.

•Resistance to capture: no central issuer to influence, no board to replace.

•Settlement without permission: value transfer does not require institutional approval.

Does this sound familiar? Indeed, Bitcoin.

Bitcoin occupies a distinct position within this experiment. Not because it is flawless today, but because it potentially represents the first monetary network to satisfy Hayek’s crucial condition. It is a form of currency introduced through a mechanism that cannot be easily halted. As Bitcoin experiences price discovery, its volatility signifies the cost of its inception and the market determining the value of an unregulated, credibly scarce asset in a fiat-trained world. However, even during this tumultuous phase, Bitcoin fulfills a remarkable number of Hayek’s criteria.

The trojan horse: stablecoins and the hidden trap

To be candid, stablecoins are presently one of the most successful applications of crypto. They are rapid, programmable, and straightforward to price. They traverse borders with significantly less friction than traditional bank transfers.

Nevertheless, here’s the uncomfortable reality: stablecoins do not denationalize money. They merely digitize existing national currencies and broaden their reach. Most stablecoins do not compete with the dollar; they replicate it.

The dollar functions as a tool of state policy. Pegging to it binds you to its inflation, surveillance, sanction regime, banking chokepoints, and regulatory priorities. While stablecoins may appear liberating due to their operation on open networks, their underlying asset remains the same sovereign instrument.

Thus, while stablecoins can be advantageous, they also pose the risk of becoming an ideal conduit for tighter control. In this regard, stablecoins are not neutral; they compete against decentralized currencies. If Bitcoin represents denationalization, stablecoins signify nationalization with improved user interfaces.

The genuine end user

This is where the narrative becomes more intriguing and more aligned with Hayek’s ideas.

Humans are emotional, irrational, politically motivated, and short-sighted. Our monetary systems reflect these traits. We frequently trade long-term stability for immediate relief, then express surprise when crises escalate.

But what occurs when the majority of participants in the economy are not humans?

With the rapid advancement of autonomous software and applications increasingly designed for agents through frameworks such as Model Context Protocol (MCP), there is a plausible near-future scenario where autonomous agents acquire services, data, computing power, API calls, storage, inference, and specialized tools via continual micropayments.

Agents will prioritize attributes such as:

•machine-readable transaction metadata

•instant, programmable finality

•composability with other systems

•minimal transaction overhead

•resistance to censorship (as uptime is a feature)

•predictable monetary rules (as models optimize against them)

Perhaps humans won’t select the optimal currency due to our entanglement in politics, habits, and fears.

Maybe Hayek’s “new money” was never intended for human users — at least not initially.

Perhaps the path that governments “cannot stop” is not a widespread political movement.

It might be AI agents who operate at machine speed, unconcerned with national identities, optimizing for reliability, who will determine the new monetary frameworks.

When that tipping point is reached, the denationalization of money will not feel like a philosophical victory. It will manifest as an unavoidable engineering outcome, driven not by ideology, but by fundamental machine necessity.

When that tipping point is reached, the denationalization of money will not feel like a philosophical victory. It will manifest as an unavoidable engineering outcome, driven not by ideology, but by fundamental machine necessity.

Headlines of the Week

– By Francisco Rodrigues

Major players in traditional finance, including the owner of the NYSE, ICE, and Morgan Stanley, continue to make strategic advancements in the crypto sector, while regulatory developments like Kraken securing access to the Fed signal the industry’s trajectory toward mainstream integration.

• NYSE owner invests in crypto exchange OKX at $25 billion valuation: Intercontinental Exchange, the parent company of the New York Stock Exchange, acquired a minority stake in crypto exchange OKX, valuing the firm at $25 billion. ICE will license OKX’s spot crypto prices to introduce crypto futures, while OKX will provide ICE futures and tokenized equities to its clientele.
• Morgan Stanley identifies Coinbase and BNY as custodians in proposed bitcoin ETF application: The Wall Street giant revised its S-1 filing for a proposed spot bitcoin ETF, naming BNY as administrator and cash custodian, and Coinbase Custody as the crypto custodian.
• Kraken becomes the first crypto firm to obtain Fed master account access: This approval enables Kraken to expedite deposits and withdrawals for large traders and institutional clients, although it is limited, with Kraken not accruing interest on reserves or accessing the Fed’s emergency lending services.
• Kazakhstan’s central bank to invest $350 million in gold and forex reserves into digital assets: This strategy will focus on shares of high-tech and cryptocurrency infrastructure firms, alongside crypto-linked index funds.
• Billions in crypto are flowing out of Iran. Analysts disagree on whether it’s wartime panic or routine operations: Following airstrikes on Iran on February 28, crypto outflows from Nobitex surged 873%, indicating a possible “digital bank run.” The situation may be more nuanced.

Chart of the Week

Kamino achieves $90M in OnRe liquidity while $KMNO declines by 16%

Kamino’s OnRe marketplace has surged by 80% to nearly $90M in just 30 days, solidifying its role as the primary liquidity layer for OnRe’s on-chain reinsurance protocol. This expansion allows users to invest in a $480B+ real-world vertical by utilizing $ONyc—a tokenized insurance asset—as collateral.

However, this fundamental scaling of real-world assets sharply contrasts with the native $KMNO token; the KMNO/SOL pair has decreased by 16% over six months, influenced by a broader market decline and the unlocking of 13M tokens monthly (0.13% of total supply).