Your bank’s next customer is an algorithm: how AI agents will decide where money moves - AI agents are becoming economic actors that can select banks, negotiate terms, move money and allocate capital without step-by-step human approval. This article examines how financial institutions must redesign identity, compliance, credit, payments and product architecture for machine customers. The winners will offer programmable accounts, verifiable authority, real-time risk controls and reliable settlement. Banks that continue competing only for human attention may discover that software increasingly decides where money, deposits and commercial relationships flow globally.

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The $1 trillion insurance tokenisation bet: can blockchain fix property data, or simply repackage old risks? - for more than a decade, blockchain has been marketed as a technology capable of making insurance faster, more transparent and increasingly automated. Yet the industry’s most important blockchain experiment is not about claims or payments. It is about rebuilding the fragmented property-data infrastructure that determines how billions of dollars of risk are priced each year.

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When digital dollars pay different rates: is Gresham’s Law returning? - digital finance is blurring the boundary between money and investment. Stablecoins, tokenised funds and digital gilts can now move almost instantly, whilst AI agents may automatically shift capital toward the highest yield and convert it into payment money only when required. This could improve efficiency and returns but also fragment liquidity, pressure bank deposits and weaken monetary-policy transmission. Governments must therefore preserve convertibility, transparency and trust without preventing innovation in programmable, yield-sensitive forms of money.

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Pump.fun built crypto’s perfect casino: then the degens found better tables - Pump.fun transformed memecoin creation into one of crypto’s most profitable platforms by removing technical barriers and monetising speculation at scale. But falling revenues, fierce competition, regulatory scrutiny and user fatigue exposed the weakness of a model built on constant attention and low switching costs. The platform survived, yet its cultural dominance faded. Its rise and retreat show that blockchain can create markets instantly but cannot manufacture trust, lasting demand or genuine economic value for users.

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There is a particular kind of silence that settles over a casino at four in the morning, after the high rollers have left and only those who cannot walk away remain. Something similar has descended on Pump.fun. The machine that turned the “degen” from a crypto subculture into the mascot of a speculative generation is still running. Its lights remain on, tokens are still launched and substantial fees are still collected. But the frenzy has faded, automated traders have become more visible and Pump.fun has moved from cultural phenomenon to one more table in crypto’s expanding casino. This is not the story of a failed platform. It is the story of a platform that lost cultural dominance whilst remaining commercially viable.

The machine

Pump.fun launched on Solana in early 2024 with a brutally simple proposition: anyone could create a tradeable token in minutes, without coding, permission or the capital normally required to seed a market. The engine was a bonding curve. Rather than using a conventional order book, each token began inside a constant-product automated market maker. Every purchase moved the quoted price higher; every sale moved it lower and successful tokens eventually “graduated” into a deeper PumpSwap liquidity pool. Buying early provided a lower entry price but never guaranteed a profit. Returns still depended on subsequent demand and the ability to exit before liquidity disappeared. The model solved crypto’s cold-start problem. Creators obtained instant distribution, buyers received immediate price discovery and Pump.fun earned fees whenever users traded. Solana supplied the speed and low transaction costs needed to make millions of small speculative bets economically possible. At its January 2025 peak, Pump.fun generated approximately $149.8 million in monthly revenue and was responsible for a large proportion of new Solana token launches. In Q2 2026, Solan has generated over $250million of revenue whereby making it: “Top Blockchain Ranking by Daily Network Revenue”, proving that the platform had not disappeared even though monthly activity was far below its peak.

The real product was attention

Pump.fun did not need most tokens to succeed. It needed users to keep creating and trading them. Every failed coin could be disastrous for its holders yet commercially productive for the platform. The launchpad earned from activity, whilst traders absorbed the losses when attention moved elsewhere. Breakout tokens served as advertisements for the next launch, convincing new participants that a few dollars could become a fortune. This was Pump.fun’s true moat. The bonding curve was easy to copy. The crowd gathered around it was not. But when switching costs are negligible, market share built on incentives rather than trust is rented, not owned. Traders had little reason to remain loyal once competitors offered lower fees, stronger liquidity or a more attractive narrative.

The odds become visible

Memecoin culture treated losses as entertainment. The “degen” identity celebrated speed, risk and the willingness to laugh at financial self-destruction. For a time, enough traders won spectacularly to keep the lottery selling itself. The underlying probabilities were far less glamorous; Solidus Labs found that 98.6% of the Pump.fun tokens it examined had fallen below $1,000 of remaining liquidity and were effectively worthless under its methodology. That figure should not be described as proof that every such token was a deliberate rug pull. It includes outright fraud and pump-and-dump schemes but may also capture abandoned experiments and tokens that simply failed to attract demand. In July 2026, research preprint reviewed 832,941 token launches between May and June and found that fewer than 0.2% attracted enough demand to graduate within 24 hours. Although the findings have not yet undergone full academic peer review, they highlight the underlying problem: creating a token had become extremely easy, but finding enough genuine buyers to sustain it remained exceptionally difficult. The market was also worse than a zero-sum game. Traders did not simply exchange profits and losses among themselves; protocol fees, creator fees, transaction costs and poor execution continuously removed value, meaning participants collectively were likely to lose money even before failed tokens and fraudulent activity were considered. Pump.fun’s current bonding curve charges a total trading fee of 1.25%, divided between the creator and protocol. The house did not need to predict which token would win. It collected revenue from the attempt.

The crack and the exodus

Pump.fun’s official X account was compromised in February 2025 and used to promote fraudulent tokens, foreshadowing the trust problem that would follow. Revenue then fell sharply from its January peak. The platform subsequently attempted to turn its success into permanent capital. In July 2025, its public PUMP token sale raised approximately $600 million in just 12 minutes, alongside a reported $400 million private sale. Instead of securing loyalty, the token sharpened questions about whether the platform, token holders and traders shared the same economic interests. Competition exposed how little loyalty existed. In July 2025, Pump.fun’s share of tokens deployed through Solana launchpads briefly fell from 88% to 19%, whilst LetsBonk and other rivals attracted creators through different fees, communities and liquidity arrangements. Pump.fun later recovered much of its launch share through fee changes and incentives, but the episode revealed that its monopoly had been built on extraordinarily low switching costs. The wider memecoin market was also contracting. Speculators migrated toward perpetual-futures exchanges and prediction markets, where liquidity was deeper, trade sizes were larger and the gambling experience appeared more sophisticated. The casino did not close. The players found tables with better odds and higher limits.

Regulation enters the casino

Pump.fun now faces a regulatory challenge as fragmented as the market it helped create. In February 2025, SEC staff said that typical memecoins resembling collectibles generally do not constitute securities whilst stressing that the conclusion depends on the economic reality of each offering. Commissioner Caroline Crenshaw challenged that approach, arguing that broad labels cannot replace the fact-specific analysis required by securities law. In the UK, the FCA placed Pump.fun on its warning list in December 2024, stating that it might be providing or promoting financial services without authorization. UK users dealing with the platform would not normally have access to the Financial Ombudsman Service or Financial Services Compensation Scheme. Pump.fun and other Solana ecosystem participants also face pending US litigation containing securities and RICO allegations. These are contested claims, not judicial findings. The distinction matters. Pump.fun should be scrutinized rigorously, but criticism loses force when allegations are presented as verdicts.

The reckoning

Pump.fun has tried to realign its economics with token holders. In April 2026, it burned approximately $370 million of repurchased PUMP (around 36% of circulating supply) and committed 50% of revenue for one year to a programmatic buy-and-burn mechanism. Yet token engineering cannot recreate cultural momentum on its own; current data still show a functioning and profitable platform. DefiLlama reported approximately $18.8 million of revenue over the latest 30-day period when checked in July 2026. Pump.fun did not die. It became normalised. That may be the more important outcome. Pump.fun proved that blockchain can remove almost every technical and financial barrier to creating a market. It also proved that removing friction does not create value, trust or lasting demand. When issuance costs approach zero, markets do not automatically allocate capital more efficiently. They can manufacture disposable assets faster than human attention can absorb them. Pump.fun demonstrated that almost anyone can create a market. It did not demonstrate that every market deserves to exist.

The next generation of crypto platforms will be judged less by how many assets they create and more by whether users leave with something more durable than a transaction receipt. The degens did not leave because the machine stopped working. They left because it worked exactly as designed, and eventually they understood who the design rewarded.

Digital finance is now testing that principle in a new form. The United States’ GENIUS Act, formally the Guiding and Establishing National Innovation for US Stablecoins Act, created a federal framework for payment stablecoins. It requires permitted issuers to maintain reserves at least one-for-one in cash, short-dated Treasuries, overnight repurchase agreements and other highly liquid assets. Crucially, the law prevents an issuer from paying interest or yield merely because someone holds, uses or retains its stablecoin. That restriction is not an accidental concession to banks - it preserves the distinction between money and an investment. A payment stablecoin promises redeemability at a fixed monetary value. A bond, money-market fund or deposit promises a return because the holder is accepting some combination of liquidity, duration, credit or institutional risk. Once a payment instrument begins paying different rates, instruments that appear identical at one dollar may acquire very different economic characteristics.

When digital money meets AI innovation

Source: London Digital Escrow

The debate is already moving beyond issuers. The Senate’s proposed CLARITY legislation would restrict rewards on idle stablecoin balances whilst potentially allowing incentives linked to transactions. That compromise reveals the central policy problem: a stablecoin issuer may be prohibited from paying yield, yet an exchange, wallet provider or affiliated platform could still reward customers. The legal source of the payment changes but the customer may experience the product as an interest-bearing digital dollar. That distinction matters because software can combine separate products into one seamless economic experience for the customer. This is where Gresham’s Law becomes relevant, although not in its classical form. Gresham’s Law describes what happens when two forms of legally equivalent money circulate at the same official value despite different underlying worth. People spend the inferior money and retain the superior money. Competing stablecoins are not necessarily legal tender and can trade at different prices, so the comparison is imperfect. Nevertheless, the behaviour may be ‘Gresham-like’: households, companies and AI agents could retain the token offering the highest return and spend the token offering none. Yet this is also what corporate treasurers already do - they hold surplus cash in deposits, Treasury bills and money-market funds, then convert those assets into transactional money when invoices fall due. Historically, bonds did not become everyday currency because settlement was slow, ownership records were fragmented, accrued interest complicated valuation and selling an asset before making a payment created cost and delay.

Comparision between five tokenised instruments

Source: London Digital Escrow

Tokenisation is removing those frictions. BlackRock’s BUIDL fund gives qualified investors a blockchain-recorded interest in a portfolio of cash, Treasury bills and repurchase agreements, whilst Franklin Templeton has used blockchain infrastructure to record ownership in a government money-market fund. These are securities, not stablecoins, but they demonstrate that a yield-bearing asset can now sit inside a digital wallet, transfer across blockchain infrastructure and potentially be exchanged for payment money almost instantly. The risks are equally real - in March 2023, USDC temporarily lost its dollar peg after Circle disclosed that $3.3 billion of its reserves remained at Silicon Valley Bank. USDC was substantially reserved, yet uncertainty about one banking partner caused holders to sell. The episode demonstrated that assets could look identical in calm markets but behave differently when confidence is tested. The question, therefore, is not whether yield-bearing stablecoins have already destroyed monetary singularity - they have not. The more important question is whether digital infrastructure is erasing the boundary between money and investments. If every wallet can move instantly between payment tokens and tokenised securities, regulators may discover that prohibiting yield on stablecoins does not prevent digital money from becoming yield sensitive. It merely moves the yield one click away.

The next stage of this debate will not be driven only by consumers choosing between digital wallets - it will be driven by autonomous software. AI agents will increasingly compare prices, negotiate contracts, manage working capital and initiate payments. Imagine a company that holds £100 million. Today, some money remains in bank deposits for immediate payments whilst excess liquidity is placed in money-market funds. Tomorrow, an AI treasury agent could keep all idle capital in a tokenised fund, monitor liabilities continuously and convert only the exact amount required into a payment stablecoin or tokenised deposit seconds before settlement. In that world, the higher-yielding instrument is still being retained, and the non-yielding instrument is still being spent. But money’s velocity may not collapse. Automated conversion could increase transaction frequency whilst reducing the amount of capital sitting unproductively in payment accounts. The relevant question is no longer simply how quickly a stablecoin moves: policymakers must measure the velocity of the entire chain linking deposits, stablecoins, tokenised funds, collateral and settlement assets.

This also complicates claims that stablecoins will inevitably destroy bank lending. Deposits are important sources of bank funding (particularly for smaller banks) and large movements into stablecoins could raise funding costs or reduce lending capacity. However, the final impact depends on where the reserves are invested and how banks respond. They may offer higher deposit rates, issue tokenised deposits or obtain wholesale funding. Federal Reserve Governor, Stephen Miran, has argued that stablecoin growth could increase demand for Treasury securities and potentially add to the supply of loanable funds. He also acknowledged that converting existing domestic bank deposits into stablecoins could disintermediate banks and affect monetary-policy transmission. Stablecoins could therefore strengthen dollar demand whilst weakening particular institutions, and both outcomes can occur simultaneously.

The UK now faces the same strategic question from another direction. The government has announced that it intends to issue its first digital sovereign bond by early 2027. A digital gilt could improve issuance, settlement, collateral mobility and lifecycle management. It could also allow gilts to interact directly with programmable financial infrastructure. But a digital gilt is not automatically digital money. Its market price can rise or fall, it pays a coupon and its value depends on maturity and prevailing interest rates. The commercial breakthrough occurs when the digital gilt becomes usable as collateral or can be exchanged automatically into settlement money. An AI agent could hold a short-dated digital gilt, pledge it within a smart contract, draw tokenised liquidity and complete a transaction without selling the asset through today’s sequence of brokers, custodians and settlement systems. Economically, the gilt begins to perform some functions of money whilst legally remaining a security - and that possibility should shape regulation. Authorities must preserve clear redemption rights, disclose the source of every return and ensure that users know whether they hold central bank money, a bank liability, a stablecoin claim or a security. Interoperability matters because one form of regulated money should exchange for another at par without hidden discounts. Reserves must remain genuinely liquid under stress, not merely appear liquid during normal markets. Tax and accounting rules must also avoid turning every automated conversion into an administrative obstacle.

Ultimately, governments should resist two simplistic conclusions: the first is that all yield-bearing digital instruments threaten monetary stability and should be prohibited; the second is that technology can make every asset function as money without changing its risks. Yield can improve competition and reward savers, but it is never free. Someone is taking duration, liquidity, credit, operational or market risk to generate it. Newton’s achievement was to restore confidence by aligning technology, enforcement and public acceptance. The digital age requires the same alignment, but governments no longer possess an exclusive technological advantage. Banks, asset managers, stablecoin issuers and AI platforms can now create instruments that move faster than regulation and appear interchangeable on a screen. The future singleness of money will not be protected by banning innovation - it will depend on making differences visible at the moment of payment. When an AI agent can move between cash, stablecoins and sovereign debt in milliseconds, then the decisive question will not be which asset is called money: it will be which risks society has silently allowed machines to treat as equivalent.

Andrew Bailey’s warnings about monetary fragmentation are not theoretical. The GENIUS Act modification may prove them in real-time.

Series Overview

Andrew Bailey, Governor of the Bank of England, has warned repeatedly about the dangers of monetary fragmentation. This series explores whether his warnings came too late.

This is Part 4 of an 8-part series exploring “The case for the singleness of money”. Each week, a new article will build on the previous one, exploring why monetary singularity is essential, why it is being destroyed and what comes next.

Coming in this series:

Part 5: Why yield-bearing money destroys the banking system

Part 6: How tax payments became the ultimate monetary weapon

Part 7: The agentic USD threat to sterling sovereignty

Part 8: The twisted ending: why singularity is dead

*Jonny Fry is a director of London Digital Escrow

Source: X

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Could Britain’s digital gilt (DIGIT) become money? How DIGIT may reshape payments and bank funding - Britain’s digital gilt instrument could evolve from a wholesale bond-market experiment into programmable collateral for high-value commerce. Yet tokenising sovereign debt does not automatically make it money. DIGIT still needs regulated digital cash, reliable pricing, custody, legal finality and sufficient liquidity. Its larger significance may lie in enabling automated settlement and capital efficiency whilst raising difficult questions about bank funding, tax treatment and whether yield-bearing government debt could eventually compete directly with commercial bank deposits.

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DePIN: the blockchain business model that could rebuild global infrastructure - DePIN is challenging the assumption that only governments and large corporations can finance, build and operate infrastructure. By rewarding distributed contributors to deploy hardware and supply data, networks such as Helium and Hivemapper invert capital expenditure and ownership models. This article examines the opportunities, limitations and regulatory risks of decentralised infrastructure whilst asking whether models could reshape energy, AI computing, transport, weather intelligence, logistics and other industries built around scarce physical networks and proprietary data.

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Why yield-bearing bonds could never be money (the technical barriers) - last week, we explored how Sir Isaac Newton resolved the Great Recoinage crisis of 1696 through reeded coins and strict Treasury acceptance rules, preserving Britain’s monetary stability for centuries. Yet his solution relied on government maintaining technological superiority, an assumption that no longer holds. This week, we examine why yield-bearing bonds were never practical as everyday money, how digital technology is removing those barriers and why the UK government’s proposed digital gilt could prove significant.

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What attracts trillions? Why tokenisation could decide the future of global wholesale finance - the global race to tokenise wholesale financial markets has begun. Foreign exchange, government bonds, derivatives, repo and private assets are moving towards programmable, always-on financial infrastructure measured in trillions of dollars. The UK starts from a position of exceptional strength, yet leadership is far from guaranteed. This paper explores why legal certainty, digital money, trusted regulation, AI-ready infrastructure and interoperability, not blockchain alone, will determine which financial centres attract the next generation of institutional capital and autonomous AI-driven markets.

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Tokenisation is changing how wholesale markets could operate

Wholesale financial markets, foreign exchange, interest rate derivatives, bonds, repo and securities lending, and fund units are each measured in the trillions of dollars. The new DLT-based infrastructures extend trading hours, broads the investor base, and enables programmable, near-real-time settlement enhancing today’s multi-day, cross-jurisdictional settlement chains. Realising this requires carefully staged implementation with built-in recovery arrangements: the Bank of England’s own RTGS renewal now processes close to £0.8 trillion in transactions a day, shows the scale of infrastructure required and the benefits it can deliver.

Dimension

Conventional infrastructure

DLT-native infrastructure

Securities settlement

T+1 to T+2, via central clearing

Atomic (simultaneous delivery-versus-payment)

Cross-border settlement

Typically, 1–3 days via correspondent banking

Near-instant, subject to legal and liquidity constraints

Compliance checks

Often a separate manual or batch step

Embedded in transaction logic

System architecture

Centralised infrastructure

Distributed ledger (permissioned or permissionless)

Operating hours

Defined market hours

Potentially 24/7

Error correction

Can take hours depending on process

Faster, subject to AI/human verified

The UK’s starting position is strong

Deep liquidity pools, a favourable time zone, decades of infrastructure investment and a legal framework trusted internationally. The scale of the UK’s existing wholesale-market activity includes:

· foreign exchange - approximately $4.7 trillion in daily turnover, around 38% of global activity

· interest rate derivatives - around half of global turnover

· gilts outstanding - approximately £2.5 - £2.7 trillion

· repo market - approximately £0.9 trillion, up around 50% since 2018.

HM Treasury, the Bank of England and the FCA are already working together to bring tokenisation safely into this new ecosystem. HM Treasury has appointed Chris Woolard CBE as Wholesale Digital Markets Champion, tasked with providing a report on DLT adoption and interoperability in 2027.

Tokenisation activity is growing but forecasts vary widely

Industry data aggregators suggest the value of tokenised real-world assets has grown substantially over the past few years, with private credit and tokenised money-market funds as leading categories of activity. The UK is estimated to hold a single-digit percentage share of current global tokenisation-market revenue, which when set against the UK’s £14.3 trillion of total assets under management is a great opportunity. Forecasts for the size of the global tokenisation market by 2030 vary enormously, spanning a range of $2 to $30 trillion. Given the UK’s existing dominance in the underlying asset classes now being tokenised, it is likely to scale to whichever forecast is correct.

Metric

Figure

Status / Source

UK daily FX turnover

$4.7 trillion (~38% global share)

BIS Triennial Survey 2025

UK interest rate derivatives

~50% of global turnover

BIS Triennial Survey 2025

UK gilts outstanding

~£2.5–£2.7 trillion

UK DMO Debt Management Report

UK repo outstanding

~£935 billion (+~50% since 2018)

Bank of England

Global tokenised RWA growth 2023–2025

Roughly fivefold increase

Indicative industry data aggregators; estimates vary by provider

UK 2024 tokenisation-market

Single-digit % of global share

Indicative industry estimates

UK AUM

~£14.3 trillion

Investment Association 2025

RTGS rebuild cost

£431 million

Bank of England / NAO

RTGS daily throughput

~£0.8 trillion

Bank of England

Global tokenisation market by 2030

Range: ~$2–$30 trillion

Indicative wide range across BCG, McKinsey, Standard Chartered and others

DSS participants

16 firms

FCA / Bank of England

Figures marked “indicative” are drawn from industry estimates that vary widely across providers.

Other financial centres are acting

No major financial centre has yet demonstrated a fully scaled, production-grade model for tokenised wholesale settlement. Several are running substantial parallel programmes:

· the EU’s DLT Pilot Regime, live since 2023, gave Europe early experience of DLT-based trading and settlement infrastructure.

· the ECB is separately advancing tokenised central-bank-money settlement work (Pontes), to begin linking market DLT platforms to TARGET Services (H2, 2026).

· Singapore’s Project Guardian and Hong Kong’s Fintech Supervisory Sandbox provide parallel, state-backed testing grounds in Asia.

· the US continues to develop through a mixture of federal and state rules.

Competition is intensifying as every major financial centre seeks to attract the issuance, liquidity and market infrastructure that will underpin the next generation of tokenised wholesale financial markets. The UK starts from a position of genuine structural strength. It already dominates many of the underlying asset classes now being digitised, including foreign exchange, interest rate derivatives, international capital markets and asset management. Yet this advantage should not be regarded as permanent. Jurisdictions across Europe, Asia, the Middle East and North America are investing heavily in comparable tokenisation infrastructure whilst seeking to influence the international standards, legal frameworks and interoperability protocols that will govern future markets. Success is therefore likely to depend less on being first than on delivering a credible, phased strategy that combines legal certainty, operational resilience, trusted regulation and scalable market infrastructure. The Bank of England and the Financial Conduct Authority have established an important foundation through initiatives such as the Digital Securities Sandbox and synchronised settlement programmes. The challenge now is to convert the UK’s existing leadership in wholesale finance into long-term leadership in programmable, tokenised and AI-enabled capital markets before the current window of opportunity narrows.

Markets tend to accommodate regulatory uncertainty more easily than implementation uncertainty. A credible, phased delivery path even one that takes until 2028 to reach live central-bank-money settlement is likely to encourage more investment than an ambitious date that is later deferred. The priority for the year ahead is less about the size of the eventual market than about whether the UK can demonstrate, through the DSS, the DIGIT pilot and the Bank’s synchronisation work, that tokenised settlement can be made to work safely and at scale. The original Big Bang transformed London’s financial markets by removing barriers to human capital. Tokenisation could become Britain’s next Big Bang by removing barriers to machine capital. As autonomous AI agents increasingly allocate capital, manage liquidity and execute transactions, they will optimise for trusted law, trusted money, trusted regulation and trusted market infrastructure. The jurisdictions that combine those attributes first are unlikely merely to attract tokenised assets - they will attract the trillions of pounds of capital that flow through them. The race is no longer about blockchain. It is about becoming the world’s most trusted financial operating system for the AI economy.

The technical problem: detachable coupons

Let’s start with a simple question: “Why didn’t the British government just issue yield-bearing bonds and then use them as a form of payment?” If bonds pay interest, why not use them as money? They would have all the advantages of currency plus the benefit of yield, they would be backed by the government and they would be more attractive than money because they earn interest. The answer is: historically it was technically impossible. For most of history, bonds were issued with detachable coupons. Here’s how it worked:

The coupon system

Imagine a bond issued by the British government in 1850:

· the bond - a physical certificate representing £1,000 of government debt

· the coupons - attached to the bond were 80 small coupons (one payable every six months for each year of the 40-year bond term)

· the interest payment - each coupon represented an interest payment (say, £25)

· the redemption - on maturity, the bondholder could redeem the bond itself for £1,000 - i.e. would get the £1,000 paid back.

Hence, to receive an interest payment, the bondholder was required to:

· clip the coupon from the bond (literally cut it off with scissors)

· present the coupon to a bank or government office

· wait for verification (which could take days or weeks)

· receive the payment (historically in gold or silver coins).

However, this system had several logistical challenges:

Problem 1: divisibility

Bonds came in large denominations (£100, £1,000, £10,000). You couldn’t easily divide a bond to make a small purchase. If you wanted to buy a loaf of bread for one shilling, you couldn’t use a £1,000 bond. You would need to: sell the bond (which took time and required finding a buyer), convert the proceeds to smaller denominations and make the purchase. This made bonds impractical for everyday transactions. You couldn’t walk into a bakery with a £1,000 bond and expect to buy bread. The divisibility problem was fundamental.

Problem 2: interest payment logistics

Interest payments required physical processing:

· coupon clipping - the bondholder had to physically cut the coupon from the bond.

· coupon presentation - the coupon had to be physically delivered to a bank or government office.

· verification - the coupon had to be verified as genuine (was it really from the government? was it a forgery?)

· record-keeping - the payment had to be recorded in ledgers

· settlement - the payment had to be made (in coins or notes)

Each step took time - coupon processing could take weeks. Moreover, during that time, the bondholder didn’t have access to the interest payment. The payment was wedged in the system, waiting for verification and processing. Into the bargain, coupon processing was expensive - banks charged fees for processing coupons and these fees reduced the effective yield on the bond. If a bond paid 5% but the bank charged 1% in processing fees, the effective yield was only 4%.

Problem 3: verification challenges

Bonds were bearer instruments - ownership was determined by possession and this created counterfeiting risks, such as:

· coupon counterfeiting - criminals could create fake coupons that looked identical to real ones

· bond counterfeiting - criminals could create fake bonds

· verification delays - each coupon had to be verified as genuine before payment

· no centralised registry - there was no central database of legitimate bonds and coupons.

The verification problem was particularly severe. How could a bank verify that a coupon was genuine? They would need to:

· check the paper quality (was it the right type of paper?)

· check the printing quality (was it printed correctly?)

· check the serial number (was it a legitimate serial number?)

· check the bond registry (was this coupon from a legitimate bond?)

All of this took time and expertise - verification could take weeks and there was always a risk of fraud. In addition, sophisticated counterfeiters could create coupons that were nearly indistinguishable from real ones.

Problem 4: redemption complexity

Bonds had fixed maturity dates. Therefore, if you owned a £1,000 bond that matured in ten years but you needed cash today, then you had limited options. You could try to find someone to buy the bond from you but there might not be any buyers. Or you could try to borrow against the bond but that required finding a lender and negotiating terms, and all of this could take days or even weeks. This illiquidity meant that bonds couldn’t function as currency since currency needs to be instantly convertible to other goods and services: bonds are not easy to instantly be convertible.

Problem 5: velocity of money

Most importantly, yield-bearing bonds created a fundamental problem for monetary velocity. If you hold a bond that pays 5% interest, you have an incentive to hold it, not spend it. The longer you hold it, the more interest you earn but this reduces the velocity of money (the rate at which money circulates through the economy). Suppose you have £1,000. You can either:

· hold it as currency (no yield, but you can spend it anytime)

· hold it as a bond (5% yield, but you can’t spend it easily)

If you hold it as a bond, you earn £50 per year in interest. This creates a strong incentive to hold the bond rather than spend it. You would only spend it if you absolutely needed to. But if everyone holds bonds rather than spending them, money doesn’t circulate and the velocity of money approaches zero. Money is most productive when it circulates: a higher velocity of money generally reflects stronger economic activity, with households and businesses transacting more frequently, supporting growth in output and income. Yet velocity is a double-edged sword. If money begins moving too quickly, particularly through autonomous AI agents and programmable payments, it can amplify demand, distort price signals and contribute to inflationary pressures that challenge traditional central bank policy tools. This is the fundamental incompatibility between yield-bearing money and a functioning economy - money that pays yield creates incentives to hoard it and money that is hoarded doesn’t circulate. Essentially, money that doesn’t circulate can’t function as a medium of exchange.

Britain announces the launch of the first digital gilt

Source: X

Why this mattered

These technical barriers meant that bonds could never be used as an everyday currency. They were too large, too complex, too difficult to process, and too illiquid. So, the British government maintained a clear distinction:

· currency (coins and notes) - no yield but liquid, divisible, easy to transact and high velocity.

· bonds - yield-bearing, but illiquid, complex, impractical for transactions and low velocity.

This distinction was maintained for centuries: it was not a policy choice - it was a technical necessity. The technology of the time simply didn’t allow yield-bearing instruments to function as currency.

The digital age: barriers crumbling

But here’s where technology changes everything. In the digital age, many of these technical barriers have disappeared, for example:

· divisibility - digital assets can be divided into infinitesimal units (down to 10^-18 of a unit if needed)

· automation - coupon payments can be automated through smart contracts (instant, no human processing required)

· verification - blockchain technology provides cryptographic verification (instant, tamper-proof, no central authority needed)

· redemption - digital assets can be redeemed instantly (24/7, no delays)

· liquidity - digital markets provide 24/7 liquidity (you can sell instantly at any time)

Let’s examine each of these:

Divisibility in the digital age

A digital stablecoin can be divided into infinitesimal units. If you want to buy a loaf of bread for £2, you can transfer exactly £2.00000000000001 (or any amount down to the smallest unit). There’s no need to have a £1,000 bond - you can have any denomination you want.

Automated interest payments

In the digital age, interest payments can be automated through smart contracts. Instead of clipping coupons and presenting them to a bank, the smart contract automatically calculates and distributes interest payments. This happens instantly, without human intervention.

Imagine a stablecoin that automatically pays 5% annual interest. The smart contract calculates the interest every second and automatically adds it to your balance. You don’t have to do anything as the interest is paid automatically.

Cryptographic verification

Blockchain technology provides cryptographic verification. Every transaction is verified using mathematical algorithms. There’s no need to check paper quality or printing quality - the cryptography is tamper-proof. If someone tries to create a fake coin, the cryptography will immediately detect it.

Instant redemption

Digital assets can be redeemed instantly. If you own a digital stablecoin, you can convert it to another asset instantly. There’s no waiting for verification or processing - the transaction happens in seconds.

24/7 liquidity

Digital markets operate 24/7. You can buy or sell digital assets at any time, day or night, weekday or weekend - there’s always liquidity. This means that digital assets are highly liquid.

The catastrophic implication

Suddenly, yield-bearing digital assets can function as currency - the technical barriers that prevented this for centuries have vanished and this is why the GENIUS Act modification will be so dangerous. When the US government allows yield pass-through on stablecoins (a change that could happen within 18-24 months) it will remove the last technical barrier to yield-bearing currency. It is reported: “Standard Chartered analysts previously estimated that a yield provision, if enacted, could redirect up to $1 trillion in deposits away from traditional banks toward stablecoin products by 2028.” And what will happen? Exactly what economic theory predicts: Gresham’s Law in action.

The GENIUS Act experiment (projected)

Once the GENIUS Act is modified to allow yield pass-through, something remarkable will happen. Multiple competing stablecoin issuers will emerge, each offering different yields:

· issuer A (USDA) - 4.2% yield

· issuer B (USDB) - 4.8% yield

· issuer C (USDC) - 5.3% yield

· issuer D (USDD) - 5.7% yield

All of these are backed by US Treasury securities, all of them are equally safe. The only difference is the yield. Corporations and individuals will immediately begin hoarding the highest-yield stablecoins (issuer D) and spending the lowest-yield stablecoins (issuer A). Why would you spend 5.7% yield money when you could hold it and earn 5.7% annually? You wouldn’t - you would only spend it if you absolutely had to. You would hoard the high-yield money and spend the low-yield money. This potentially will create exactly the bifurcated monetary system that economic theory predicts. Two different “monies” with two different economic properties:

· high-yield stablecoins - hoarded, not spent, low velocity

· low-yield stablecoins - spent freely, high velocity

The velocity of money will fragment; monetary policy will become impossible and so the central bank’s models come under enormous pressure. Andrew Bailey sees this coming - he has warned about it. The technical barriers that have protected monetary singularity for centuries are crumbling.

What comes next?

This week, we’ve seen how technical barriers historically prevented yield-bearing bonds from being used as currency, we’ve seen how those barriers have crumbled in the digital age and we’ve seen how the GENIUS Act experiment will demonstrate the consequences. Next week, we’ll examine the projected impact of the GENIUS Act modification. We’ll see exactly how Gresham’s Law will operate in a digital, yield-bearing currency system. And we’ll begin to understand why Andrew Bailey’s warnings about monetary fragmentation prescient exist.

Next week: “How the GENIUS Act proved Gresham’s Law in real-time”

Series Overview

This is Part 3 of an 8-part series exploring “The case for the singleness of money”. Each week, a new article will build on the previous one, exploring why monetary singularity is essential, why it is being destroyed and what comes next.

Coming in this series:

Part 4: How the GENIUS Act proved Gresham’s Law in real-time

Part 5: Why yield-bearing money destroys the banking system

Part 6: How tax payments became the ultimate monetary weapon

Part 7: The agentic USD threat to sterling sovereignty

Part 8: The twisted ending: why singularity is dead

*Jonny Fry is a director of London Digital Escrow

Hivemapper has mapped 25% of roads globally

Source: X

DePIN initiatives could bootstrap infrastructure that would normally need hundreds of millions in venture or debt financing by recruiting thousands of participants to deploy hardware on a network’s behalf via token incentives. However, hardware remains necessary with the model - technology drastically transforms who funds and deploys it, dispersing cost and ownership across a global base of token-earning players rather than salary-driven participants. …

Read more

Could Britan’s digital gilt become money?

Source: TeamBlockchain.net

What DIGIT is, and what it is not

A conventional gilt is a claim on the UK government, recorded and transferred through established market infrastructure. DIGIT would be digitally native, with ownership and lifecycle events managed through a distributed-ledger environment. The FCA and Bank of England’s Digital Securities Sandbox allows approved firms to issue, trade and settle real digital securities under controlled limits and regulatory supervision. It does not remove regulation; it adapts parts of the framework so new infrastructure can be tested safely. The pilot is not a retail payment product. A car dealer, property seller or manufacturer will not automatically be able to accept DIGIT simply because it exists. Access, wallet eligibility, market liquidity, legal documentation and the treatment of the cash leg remain crucial - international experience supports this measured view. The European Investment Bank issued a £50 million sterling digital bond on HSBC Orion in 2023. The World Bank later issued a CHF200 million digital bond on SIX Digital Exchange, settled using Swiss wholesale central bank digital currency. Hong Kong has issued tokenised government green bonds, whilst the Eurosystem’s wholesale trials involved 64 participants and almost €1.6 billion of settlement in central bank money. These projects demonstrate technical feasibility but remain institutional transactions rather than everyday commerce.

Why tokenising a bond does not make it money

Money provides a unit of account, a generally accepted means of payment and a store of value, whereas a gilt is primarily an investment and collateral instrument; its market price changes with interest rates, maturity, liquidity and demand. A merchant receiving £1million of DIGIT might therefore require a live price, a haircut or immediate conversion into sterling. For DIGIT to become genuinely money-like, three tests matter. It must be widely accepted, continuously liquid and capable of legally discharging an obligation when transferred. A fourth test is political: whether government would ever accept it at par for taxes. Until then, using DIGIT to buy machinery or property would resemble payment in securities, not cash. HMRC treats non-monetary consideration as barter for VAT purposes whereby making reliable pricing and documentation essential.

The missing cash leg

Tokenised securities cannot transform settlement alone. They need a trusted digital form of sterling on the other side. The Bank of England now permits tokenised deposits and, subject to approval, certain stablecoins as settlement assets within the Digital Securities Sandbox. It is also targeting a live synchronisation service for 2028, linking transactions on external ledgers with settlement in central bank money. DIGIT could therefore settle against tokenised commercial-bank deposits, regulated sterling stablecoins or synchronised central-bank money. Each carries different credit, liquidity and regulatory characteristics. Atomic delivery-versus-payment works only when both the asset and payment legs move together or fail together. Andrew Bailey has described programmable payments as capable of making payment conditional on delivery or proof of identity. Applied to high-value commerce, a smart contract could transfer DIGIT only when a verified title changes hands. However, technical atomicity does not guarantee legal finality; digital property rights, title registries, insolvency rules, dispute resolution and custody must describe the same transaction consistently.

Consider a manufacturer buying £10million of industrial equipment: instead of selling gilts, waiting for settlement and sending a bank payment, its treasury could transfer £10million of short-dated DIGIT at an independently verified market value. The supplier might accept the securities, apply a modest liquidity ‘haircut’ or instruct an agent to convert them immediately into tokenised sterling. The benefits could include fewer reconciliation steps, faster settlement and reduced working-capital drag. The transaction could also be linked to delivery, inspection and title transfer. Yet risk remains - the buyer faces execution and wallet risk; the seller faces price and liquidity risk; and both depend on accurate identity, pricing and contractual data. Therefore, DIGIT may prove more useful as programmable collateral. DTCC estimates that minute-by-minute intraday repo on digital rails could cut intraday funding costs roughly in half whilst reducing liquidity buffers and capital requirements. A tokenised gilt could be pledged, substituted and released automatically without first being sold. This may be more valuable than turning the gilt into general-purpose payment money.

Tax advantages need qualification

For individuals, disposals of qualifying gilt-edged securities are generally exempt from Capital Gains Tax under section 115 of the Taxation of Chargeable Gains Act 1992, but that does not make every return tax-free. Coupon interest remains taxable and the Accrued Income Scheme may treat part of a sale price as income - a small-holdings exclusion applies where relevant nominal holdings do not exceed £5,000. However, companies are treated differently: gilts fall within the corporate loan-relationship regime under which relevant credits and debits are normally taxed according to the company’s accounts. A business accepting DIGIT cannot assume subsequent appreciation is an untaxed capital gain. The final terms and statutory classification must also confirm conventional gilt treatment. Nor is DIGIT an absolute refuge from risk. It reduces exposure to an individual commercial bank, and the FSCS deposit-protection limit is £120,000 per eligible depositor per authorised institution. But a digital gilt still carries market-price, inflation, operational, cybersecurity, custody and liquidity risks – hence it changes the risk profile rather than removing risk.

Could DIGIT lower borrowing costs and lift productivity?

The strongest policy case is not that everyone will pay with bonds. It is that tokenised government debt could improve collateral mobility, shorten settlement and widen access to sterling assets. The BIS has found that tokenised government bonds remain small but can show lower bid-ask spreads and issuance costs comparable with conventional bonds. Better liquidity may eventually reduce the premium investors demand, although evidence is not yet strong enough to claim that DIGIT will materially lower UK borrowing costs. The productivity effect could still be meaningful. Faster collateral movement reduces idle liquidity whilst programmable settlement can reduce reconciliation, failures and contractual uncertainty. If savings increase investment, lending and taxable profits, they could support GDP and tax receipts. The benefit will accrue to the UK only if infrastructure, skilled jobs, intellectual property and profits remain located and taxable here.

The challenge for banks and monetary singleness

If companies hold more transactional liquidity in digital gilts, stablecoins or tokenised funds, then bank deposits could decline. Moreover, banks might replace them with more expensive wholesale funding, potentially increasing lending costs for households and smaller companies. This is why the Bank of England emphasises the singleness of money: one pound in any regulated form should remain exchangeable at par with another. DIGIT is not a bank deposit, and its market price will move. If widely used as consideration, commerce could operate with a yield-bearing sovereign asset alongside par-value money. That could improve capital efficiency but could also blur the boundary between money, collateral and investment.

The commercial opportunity

The likely winners extend beyond bond issuers, including:

· banks - can provide tokenised deposits, conversion liquidity and collateral services

· exchanges and market makers - can provide continuous pricing

· custodians and wallet providers - can secure ownership

· lawyers - can connect smart-contract execution with enforceable title transfer

· insurers - can cover theft, operational failure and transaction risks

· oracle, identity, accounting and tax-software providers - can supply the trusted data automated transactions require.

Therefore, Britain’s first DIGIT should be judged as the beginning of a market architecture, not a finished payment instrument. The pilot may modernise gilt issuance but its larger opportunity is to make sovereign debt programmable, mobile and usable across settlement, repo and collateral markets, in line with the UK authorities’ wider vision for tokenised wholesale finance. If merchants eventually accept DIGIT, markets price it continuously and government accepts it for taxes, a digital bond could begin to behave similar to a yield-bearing sovereign money. That outcome is neither imminent nor inevitable. But it poses a question policymakers should address before technology answers it: will DIGIT simply modernise Britain’s debt market, or gradually redefine what counts as money in the digital economy?

Why hybrid finance (HyFi) is becoming the new operating system for blockchain, AI and tokenised markets - the blockchain industry is moving beyond the ideological debate of centralisation versus decentralisation. As banks, regulators and institutional investors embrace tokenisation, stablecoins and AI-driven commerce, a new model is emerging - hybrid finance (HyFi). This article argues that the future of financial markets lies in treating decentralisation as a strategic variable rather than an absolute principle, combining the resilience and transparency of blockchain with the governance, compliance and legal certainty required for global institutional adoption.

Click here to read the full article

Tokenised assets: building the future of capital markets or repackaging DeFi risk? Tokenised real-world assets (RWAs) have become one of the fastest-growing sectors in digital finance whereby attracting asset managers, banks and institutional investors. Yet beneath the rapid growth lies a more important question: does putting Treasuries, private credit and funds on blockchain genuinely improve liquidity, transparency and capital formation, or does it simply digitise existing financial risks? The winners will be those combining legal certainty, trusted data and robust market infrastructure, not merely blockchain technology.

Click here to read the full article

They clipped the coins: Newton’s Great Recoinage and the birth of trusted money - in 1696, Sir Isaac Newton restored confidence in England’s collapsing currency by combining technology, law and taxation to create a single trusted monetary system. His Great Recoinage established principles that underpinned the British pound for more than three centuries. Today, Bank of England Governor, Andrew Bailey, faces a far greater challenge. Instead of clipped coins, he confronts stablecoins, tokenised deposits, programmable money and AI agents capable of choosing between competing digital currencies. This article explores why the battle for monetary singularity has returned and why the rules of the game have fundamentally changed.

Click here to read the full article

Agentic payments: when AI starts buying everything - who controls money, contracts and commerce? AI agents are evolving from digital assistants into autonomous commercial actors capable of negotiating contracts, arranging insurance and executing payments in real time. This article examines how agentic commerce could combine artificial intelligence, programmable money, smart contracts and embedded insurance to automate entire transactions. It also explores the legal, regulatory and operational safeguards required to define authority, allocate liability, manage risk and ensure that human principals remain accountable when machines conduct business on their behalf.

Click here to read the full article

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Agents that negotiate, insure and pay in real time: the makings of autonomous commerce

Source: Teamblockchain

This shift is arriving at the same moment money itself is becoming programmable. Banks and card networks are building tokenised deposits, regulated stablecoins and payment rails that run around the clock instead of stopping for the weekend. Put autonomous agents and programmable money in the same room and you get something new: commercial infrastructure that can negotiate, insure and settle at machine speed. For the executives, insurers and financial institutions I advise, that is not a science-fiction problem. It is a governance problem, and it is arriving faster than most boards expect.

Start with the money at stake. OpenAI, Google, Microsoft, Anthropic and Meta are pouring capital into agents built to handle real commercial work, not party tricks. McKinsey puts the potential annual contribution of generative AI at between $2.6 trillion and $4.4 trillion across industries. Most of the early attention landed on knowledge work, lawyers, coders and analysts, but the same technology is moving into procurement, treasury, logistics and finance where the dollars are larger and the workflows more mechanical. And unlike the software your company already runs, an agent is built to finish a job end to end. A procurement agent can watch inventory, find a second source when the first one fails, compare prices, run a counterparty check, line up financing and pay the invoice the moment the contract conditions are met. It does not automate a task - it automates the whole desk.

Our payment systems were not built for that. They were built around people, banks and business hours. Software keeps no hours. It can weigh a dozen options at once and act the instant its conditions are satisfied, which is exactly why so much money is now chasing payment rails that behave the same way. Visa, Mastercard, JPMorgan Chase and Citigroup have all announced work on tokenised payments and blockchain settlement. The IMF is tracking it; central banks are building wholesale settlement infrastructure to match. The rails are being laid whether the law is ready. And the law is the part everyone underestimates. Technology can move money in a millisecond, but commerce runs on certainty, on knowing that a contract means what it says and that a court will enforce it if it does not. That is not a soft variable. It is the reason capital chooses one jurisdiction over another. The Law Society reported in 2025 that English law governs more than 40% of cross-border commercial transactions, prized for its neutrality, transparent courts and predictable outcomes. England has been doing the quiet spadework, too. The Law Commission of England and Wales has produced serious analysis of smart contracts and digital assets, concluding, sensibly, that existing law already handles most digital commerce, with a few gaps worth closing.

The United States has been doing the same work, and business lawyers here should know it cold. The Uniform Commercial Code now includes a new Article 12 governing “controllable electronic records” - the rules for control, perfection and priority when the asset changing hands is digital - and states are adopting it. In July 2025, Congress went further and enacted the GENIUS Act, the first federal framework for payment stablecoins, giving banks and issuers something they had lacked for a decade: a statute. Add the SEC, the OCC and the state insurance commissioners to the picture, and the American answer to programmable commerce is taking shape, piece by piece, in the ordinary machinery of commercial law. The next Act moving through Congress right now. The CLARITY Act, the Digital Asset Market Clarity Act, would finally settle the question that has dogged this market for a decade and has resulted in continuing volatility. The question of when a token is a security under the SEC and when is it a commodity under the CFTC, may finally be resolved by regulation. The House of Representatives passed the CLARITY Act in 2025. The Senate Banking Committee advanced its own version in May 2026 on a bipartisan vote. As of this writing, the two chambers are still fighting over the details. Whether it clears this year or next, the direction is unmistakable - Washington is drawing the lines around digital assets one statute at a time.

Insurance is the layer almost no one talks about, and it may be the one that decides how fast any of this scales. Insurance built the modern economy by moving risk off the people who could not carry it and onto institutions designed to. Mortgage insurance opened home lending. Export-credit insurance underwrote global trade. Political-risk cover made foreign investment thinkable. The same logic is now aimed at digital commerce, where new products could stand behind programmable payments, tokenised assets and automated performance. I made a version of this case in an article I wrote in November 2025 - Insured Reality: How Blockchain and Insurance Will Redefine Property Ownership. Tokenised real estate stays a novelty until insurance stands behind it, and only then does it become institutional-grade, financeable, legally enforceable wealth. What was true for property is true for payments. Insurance does not make risk disappear; it puts risk where it can be priced and absorbed, and that is what lets counterparties do bigger, more complicated deals than they otherwise would.

Stack these layers - AI, programmable money, digital identity, insurance and enforceable commercial law - and you are not looking at five separate trends. You are looking at the floors of a single building. As it goes up, the work that today takes a procurement team, a treasury desk, an underwriter, a lawyer and a payment processor may increasingly run through software operating inside rules the company sets in advance.

When AI starts paying AI

Here is the part that should get a board’s attention: transactions may start originating from software instead of people. Not employees hunting for suppliers and signing off on wires, but agents doing that work continuously, inside guardrails their organisations define. Think about how a purchase happens today. Purchasing, legal, treasury, compliance and finance each take a turn - vetting the supplier, papering the deal, sizing the risk, letting the money go. Agentic systems compress those handoffs into one motion: monitor inventory, compare suppliers, price the financing, arrange the cover and pay once the conditions are met.

The infrastructure is already here. The banks and networks named above are building the rails, and regulated stablecoin regimes are now live across the United States, the European Union, Hong Kong and the United Kingdom. What was theoretical two years ago is operational today.

Every business makes and receives payments, so the implications run well past efficiency. International trade still moves on documents, reconciliation and trust between strangers. Instruments such as the letter of credit exist to bridge that trust gap - useful, but slow and expensive. Pair programmable payments with digital identity and insurance, and much of that choreography can be verified digitally and settled the moment obligations are confirmed. The same logic reaches project finance, supply-chain finance and infrastructure, where an agent can keep a constant eye on financing costs, premiums, commodity prices and market conditions before it commits. Meanwhile, insurance runs through all of it. The mortgage-insurance playbook, broaden a market by underwriting its risk - is being rewritten for tokenised assets, automated obligations and machine-generated transactions. Even the supervisors see it coming: the International Association of Insurance Supervisors has been pressing regulators to keep their frameworks moving at the pace of the technology.

Autonomous agents also raise a question I find genuinely interesting: what happens to money itself? People pick a payment method out of habit, geography or regulation. An agent will not. It will optimise - for transaction cost, settlement speed, liquidity, interoperability and legal certainty - and it will switch the instant a better option appears. That turns money into a competition for machine preference, not just human loyalty. The winning form of digital money may be whichever one serves autonomous commerce best, retail habits notwithstanding. And that leaves policymakers with questions they have barely begun to answer:

· How do you supervise payment flows that software generates on its own?

· Who is liable when an AI negotiates a binding deal inside its approved parameters and the deal goes wrong?

· What happens to anti-money-laundering regimes when machine-generated payments run into the billions per day?

· How does a central bank even measure monetary activity when a growing share of commerce settles in programmable money moving across multiple blockchains?

Governments are not answering those questions the same way, and the divergence is the story. The European Union’s AI Act takes the cautious route, demanding real human oversight wherever an AI system makes consequential legal or financial decisions. The United Kingdom is going principles-first, with the Financial Conduct Authority feeling out how to supervise autonomous agents without smothering them. The United States is betting on the market for AI itself - the current administration would rather let the technology mature than write a comprehensive rulebook, even as Congress builds the digital-asset plumbing piece by piece, stablecoins first, market structure next. Reading the same tea leaves, the US Consumer Bankers Association has argued that developers, banks, networks, merchants and technology providers should build the guardrails - consumer protection, governance, operational controls - before regulation catches up. Three bets, one experiment:

1. Europe regulates before scale,

2. America innovates before regulation, and

3. Britain tries to split the difference.

Step back from the noise about jobs and productivity, and a deeper shift comes into view. Every economy rests on three things: contracts created, risk gets moved and payments get made. Let software do all three, negotiate the contract, place the insurance, send the money and you have changed the architecture of commerce itself, not just its user interface.

History has a lesson here worth remembering. Financial leadership has almost never gone to whoever had the fastest technology - it went to whoever paired good technology with trusted law, sound institutions and deep, liquid markets. Venice, Amsterdam, London, New York, each won because it was safe to do business there, not merely fast. As autonomous commerce grows up, those old foundations will matter as much as the algorithms. Which is why the questions facing governments, central banks and financial institutions are now strategic, not technical. When agents optimise for liquidity, settlement speed and legal certainty instead of national loyalty, which currencies will they prefer? Which jurisdictions will they choose to call home? If software becomes the largest buyer of goods and services on the planet, how does a regulator watch the money, run monetary policy and keep the system stable? And if billions of machine-to-machine transactions clear every day, are today’s payment systems, rules and commercial codes remotely fit for the job?

The next chapter of finance may be written less by people choosing how to pay than by machines deciding whom to buy from, how to contract, when to settle and which money to trust. The institutions that see this early will not just modernise their payments. They will help write the rules for an economy in which the busiest participants are not people at all.

In Part 1 of “The Case for the Singleness of Money”, we explored Bank of England Governor, Andrew Bailey’s, warning that “money must be singular” - a principle that has underpinned monetary stability for centuries. The concern is that a financial system cannot function efficiently if multiple forms of money circulate with different yields, risks and economic characteristics. History offers a powerful precedent. Gresham’s Law showed that when “good” and “bad” money co-exist, people spend the lower-quality currency and hoard the better one, fragmenting liquidity and undermining confidence. Today, the same risk is emerging as yield-bearing stablecoins, tokenised money market funds, tokenised deposits and central bank money begin to compete for capital. This week, we turn to 1696, when England faced a remarkably similar monetary crisis and where widespread coin clipping had destroyed confidence in the currency whereby paralysing trade and collapsing tax revenues. The government at the time turned to Sir Isaac Newton (newly appointed Master of the Royal Mint) who introduced reeded-edge coins, modern minting technology and rigorous quality standards to restore trust in money. His solution was not merely monetary, it was technological.

Comparison of Newton with today’s digital infrastructure

Source: London Digital Escrow

The lesson is profound. Every major evolution in money has depended on combining technology, law and trust - and Newton solved the challenges of physical money. Today’s policymakers face a different challenge: securing trust in digital money. The question is whether tokenisation, digital identity, programmable regulation and AI governance can become the modern equivalent of Newton’s reeded coin, providing the confidence required for the next generation of global commerce.

The critical decision: tax acceptance policy

Newton did not merely redesign coins. He redesigned the entire monetary ecosystem by aligning technology, taxation, law and incentives around a single trusted standard. But here’s the most important part of Newton’s solution - the part that actually made it work:

Newton convinced the Treasury to only accept reeded coins for tax payment. This was the key: clipped coins were no longer acceptable for paying taxes. If you owed taxes to the Crown, you had to obtain reeded coins and, therefore, this created universal demand for the new currency. Let’s think about the economic incentives this created - if you were a merchant or a landowner, you owed taxes to the Crown and you had two choices:

1. try to pay with clipped coins (which the Treasury would reject)

2. obtain reeded coins to pay your taxes.

The choice was obvious. You needed reeded coins, which meant that every person with tax obligations had to obtain reeded coins. What happened next was remarkable:

· immediate demonetisation - clipped coins became worthless overnight because they couldn’t be used to pay taxes.

· rapid currency replacement - within months, reeded coins replaced clipped coins in circulation.

· monetary singularity restored - there was now only one acceptable form of money.

· economic recovery - with a single, trusted currency, commerce resumed and the economy recovered.

The speed of this transition was remarkable. Within a year of implementing the ‘reeding system’ and the tax acceptance policy, the vast majority of clipped coins had been replaced by reeded coins. The monetary system had been restored.

Why Newton’s solution worked

Newton’s solution worked because it combined three elements:

1. technological superiority - reeded coins were technically superior to clipped coins because they were impossible to clip without detection

2. universal enforcement - the Treasury’s tax acceptance policy made reeded coins mandatory; everyone needed them to pay taxes

3. economic incentive - everyone had a direct economic incentive to obtain reeded coins; without them, you couldn’t pay your taxes.

This was the perfect solution to Gresham’s Law. By making the “good money” (reeded coins) the only acceptable form for tax payment, Newton eliminated the incentive to hoard it. Everyone needed reeded coins for taxes, hence they circulated. Unsurprisingly, clipped coins became worthless and disappeared. Moreover, the reeded coin system was self-reinforcing - as more people obtained reeded coins, merchants became more willing to accept them; and, as merchants accepted them, more people obtained them. The system created a positive feedback loop that rapidly drove out competing currencies.

The 330-year reign of singularity

Newton’s solution worked so well that it established a principle that lasted for 330 years: monetary singularity enforced through technological superiority and tax acceptance policy.

For three centuries, the British pound was singular - it was overseen by the Bank of England, was legal tender and was accepted for taxes. Furthermore, this singularity was maintained through:

· technological control - only the government could mint coins (and later, only the BoE could issue notes)

· tax enforcement - only the government’s currency was accepted for tax payment

· legal prohibition - competing currencies were illegal

· social enforcement - the public trusted the government’s currency because it was backed by the government’s authority.

This system worked remarkably well. It enabled: - Stable monetary policy an effective tax collection, an internationally regraded secure banking system, enabling economic growth and he rise of London as a global financial centre. Andrew Bailey inherited this system - he understood its power and he believed it could be maintained indefinitely. Indeed, Bailey recently outlined a clear strategic embrace of tokenisation as a core component of the future of money and payments. He highlighted the potential of tokenised bank deposits and programmable infrastructure to deliver faster, 24/7 settlement whilst maintaining regulatory oversight. He has also emphasised that the Bank is actively exploring how tokenisation can enhance efficiency in wholesale markets without compromising financial stability.

However, there exists a problem: technology has changed, and here’s where the story takes a dark turn. Newton’s solution depended on one critical assumption: the government could maintain technological superiority over potential competitors. In 1696, this was easy. Creating reeded coins required precision machinery that only the government possessed and hence counterfeiting was nearly impossible. Back then, the government’s monopoly on money creation was absolute. But technology has changed - today, anyone with a computer can create a digital currency, anyone with access to blockchain technology can issue a stablecoin and anyone with sufficient capital can create a competing form of money, programmable digital money. A dramatic example of this is Tether, which is arguably the most profitable company in the world per employee since each employee has generated the equivalent of $85million each. And in the case of Circle, the second biggest stablecoin after Tether, trust has been built from transparent reserves and regulation. Essentially, the technological monopoly that Newton established is gone; moreover, the barriers to entry for creating competing currencies have collapsed. In 1696, you needed:

· precision machinery (extremely expensive and rare)

· skilled metalworkers (years of training required)

· access to precious metals (controlled by the government)

· government permission (which was never granted).

Today, you need: a computer, knowledge of blockchain technology and some capital to back the stablecoin - that’s it. The technological barriers have vanished - anyone can create a competing currency. The government’s monopoly is broken.

The paradox: technology that enforces vs. technology that fragments

This reveals a profound paradox in monetary history. Newton had one competitor - clipped coins. Bailey faces hundreds, including:

· stablecoins

· tokenised deposits

· CBDCs

· tokenised MMFs

· tokenised Treasuries

· AI-generated money

· programmable collateral

Without doubt, Bailey’s challenge is harder...

Newton used technology to enforce monetary singularity - the reeded coin was so superior to clipped coins that it immediately became the only acceptable form of currency. Essentially, technology was the tool that enforced the government’s monopoly. But today, technology is being used to create monetary fragmentation. Blockchain technology allows anyone to create competing currencies and cryptographic verification allows multiple issuers to create competing stablecoins. The same tools that could enforce singularity are being used to create fragmentation. This is the central paradox that we’ll explore throughout this series; technology that was once a tool for enforcing monetary control is now a tool for undermining it. Then there is the looming challenge of AI-powered agents. Presently, humans choose money: potentially, tomorrow AI chooses money, but which type of money will AI choose?

· lowest cost?

· highest yield?

· fastest settlement?

· most trusted?

· best legal framework?

· programmable?

· available 24/7?

That completely changes monetary policy. One cannot help but wonder if blockchain technology and computing power had existed, then what would Sir Isaac Newton have done?:

· tokenised silver?

· created a CBDC?

· required taxes be paid in programmable money?

· used smart contracts?

· built a unified ledger?

What comes next?

This is where the story becomes truly interesting, and truly troubling. Andrew Bailey understands Newton’s solution. He understands that monetary singularity requires technological superiority and tax enforcement and he has tried to maintain both. But he is fighting against technology itself. And technology, as we will see, always wins. Arguably, the unit of competition has changed. In 1696, governments competed against counterfeiters. In 2026, they compete against private digital money, tokenised assets and, increasingly, AI agents that can choose which money to hold and transact with.

Next week: Article 3 in this series, “The Singleness of Money”: “Why yield-bearing bonds could never be money”. We’ll examine the technical barriers that historically prevented yield-bearing bonds from being used as currency and we’ll begin to understand why those barriers are crumbling in the digital age.

Series Overview

Andrew Bailey, Governor of the Bank of England, has warned repeatedly about the dangers of monetary fragmentation. This series explores whether his warnings came too late.

This is Part 2 of an 8-part series exploring “The case for the singleness of money”. Each week, a new article will build on the previous one, exploring why monetary singularity is essential, why it is being destroyed and what comes next.

Coming in this series:

Part 3: Why yield-bearing bonds could never be money (the technical barriers)

Part 4: How the GENIUS Act proved Gresham’s Law in real-time

Part 5: Why yield-bearing money destroys the banking system

Part 6: How tax payments became the ultimate monetary weapon

Part 7: The agentic USD threat to sterling sovereignty

Part 8: The twisted ending: why singularity is dead

*Jonny Fry is a director of London Digital Escrow

Source: RWA.xyz

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Why crypto’s biggest success story continues to lose the headlines - stablecoins are quietly transforming global payments, remittances and cross-border commerce (processing trillions of dollars annually) whilst the headlines remain dominated by hacks, memecoins and viral stunts. This article explores why the blockchain industry continues to struggle to communicate its most important achievements, despite growing adoption by institutions such as Western Union and Meta. The greatest challenge facing Web3 may no longer be technology or regulation but explaining its real-world value.

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Rome’s 2000-year-old answer to AI liability: give the agent a budget, not legal personhood - AI agents can now negotiate, trade, sign contracts and move assets, yet they lack legal personality and cannot bear responsibility. This article explores how Rome’s “peculium” model (combining delegated authority, segregated assets and calibrated liability) could inspire modern AI governance. Drawing on historical sources, landmark cases and emerging regulation, it proposes a “peculium protocol” enabling autonomous commerce whilst preserving human accountability, enforceable limits, transparent records and credible recourse for counterparties and asset owners.

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The end of monetary singleness? Why Andrew Bailey’s warning could reshape the future of digital money - Bank of England Governor, Andrew Bailey, has warned that “money must be singular”, yet the rapid growth of yield-bearing stablecoins, programmable digital dollars and AI-driven payments is challenging one of the oldest principles of modern monetary policy. This article explores whether the fragmentation of money threatens central banks’ ability to control inflation, interest rates and financial stability, and asks whether governments can preserve monetary sovereignty as AI agents increasingly determine how, where and in which form money circulates.

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Guided autonomous AI: why the smartest AI will not win, but the most trusted one will -

artificial intelligence is rapidly evolving into an autonomous economic actor capable of negotiating contracts, allocating capital and initiating payments. But as AI gains greater capability, the defining challenge is no longer intelligence - it is authority. This article introduces guided autonomous AI, arguing that every significant AI system should operate within a “schedule of authority” that clearly defines what it may decide, when human approval is required and who remains accountable. In the AI economy, trust, governance and human sovereignty may become the ultimate competitive advantages.

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Perhaps the clearest recent example is the rapid rise of agentic AI. Indeed, we are already seeing AI agents becoming economic participants - Coinbase’s x402 protocol enables AI agents to authenticate, negotiate and pay for APIs, datasets and digital services using stablecoins without human intervention. Unlike traditional chatbots that simply respond to prompts, agentic systems can pursue goals over extended periods, break complex objectives into smaller tasks, call external tools, access databases, collaborate with other AI agents and adapt their strategies as circumstances change. Rather than merely answering questions, they can complete projects. The commercial momentum behind this vision is immense. Companies such as OpenAI, Google, Microsoft, Anthropic, Tesla and many others are investing billions of dollars to develop increasingly capable autonomous systems. Governments are similarly exploring autonomous AI for public services, defence, scientific research, infrastructure management and economic planning. The race is no longer simply to build smarter machines; it is to build machines that require less and less human intervention. At first glance, this appears to be an entirely logical progression. Greater autonomy promises greater efficiency. Machines do not tire, forget, become distracted or require holidays. They can operate continuously, process enormous quantities of information and often respond far faster than human operators. In environments where speed, precision and scale are paramount, increasing autonomy can produce extraordinary economic and societal benefits. Yet, I believe, this pursuit raises an important question that has received far less attention than the engineering itself. Should every decision be made autonomous simply because it can be?

History suggests otherwise. Humanity has repeatedly developed technologies that are technically capable of complete autonomy, yet deliberately chooses to keep humans within the decision loop whenever the consequences are significant. Commercial aircraft can fly for most of a journey using autopilot, but qualified pilots remain responsible for critical decisions. Modern hospitals rely heavily on AI-assisted diagnostics, yet physicians remain accountable for diagnoses and treatment decisions. Even biological systems such as highly trained police dogs, despite years of specialised training, are never regarded as autonomous decision-makers; they remain extensions of their handlers’ judgement and authority. Corporate treasury systems such as SAP and Oracle already use approval workflows too. Payments.com recently wrote: “Agentic commerce turns corporate API calls, software usage, data checks, AI tasks and back-office workflows into payable events, making finance and procurement the first serious test cases of AI agents in a wholesale, not retail, setting.”

These examples point to a distinction that may become one of the defining challenges of the AI age. The objective should perhaps not be to maximise machine autonomy, but to determine where autonomy is appropriate and where it must remain guided by human authority, accountability, and values. I believe payment systems and financial transaction fall into this category. I believe that the next chapter of artificial intelligence may not be about creating machines that operate entirely on their own. It may instead be about designing machines whose autonomy is explicitly bounded, governed and accountable, a philosophy that could be described as Guided Autonomous AI Systems, where machines are empowered to act independently within carefully defined limits whilst ultimate responsibility always remains with the humans they serve. Today the narrative is becoming familiar. We celebrate every milestone where AI requires less human intervention, makes more decisions on its own and carries out increasingly complex tasks without supervision. But perhaps we have been heading in the wrong direction. The issue is not:

“How autonomous should AI become?” The more important question is: “Over what decisions should humans never relinquish sovereignty?”

There is a profound difference between an AI acting for a human and an AI acting instead of a human. Unfortunately, this distinction is becoming increasingly blurred as we dive into the age of agentic AI. Autonomy is not the problem. I believe autonomy itself is not dangerous. In fact, autonomy is exactly what makes AI valuable. An AI agent that can organise meetings, optimise supply chains, negotiate prices, analyse medical images, draft legal contracts, monitor industrial systems or manage logistics without constant supervision can dramatically improve productivity. Autonomy is a capability. It enables machines to perform tasks faster, more consistently and often more accurately than humans. The problem begins when capability is mistaken for authority. In this regard there is a big difference between capability and authority. Consider a highly trained police dog, an example I referred to earlier. It can search buildings, detect explosives, track suspects and make split-second operational decisions. It displays remarkable autonomy within its area of expertise. Yet nobody considers the dog an independent authority. Why? Because every action ultimately remains under the authority of its handler. The moment the dog ceases to obey lawful commands, it can no longer serve in that role. Its operational autonomy becomes a liability because the chain of accountability has been broken.

The same principle should apply to AI. Indeed, back in 2022, Anthropic proposed that AI ought to operate under predefined principles. In the EU, the AI Act is proposing, “high-risk transactions” using AI requires meaningful human oversight and the US Government has already recognised use of AI needs governance, accountability, human oversight, risk controls and verification. In business, Visa and Mastercard believe that if AI Agents can have authority to transact, they must do so within predefined parameters. So, whilst an AI agent may independently perform thousands of operational decisions every hour, those decisions should always remain within a clearly defined framework of delegated human authority. We need to move away from this illusion of AI becoming an independent economic actor, something a number of commentators are suggesting. In this scenario AI agents will soon become economic actors in their own right - negotiating contracts, making purchases, investing capital and settling disputes with little or no human intervention.

Technically, this may become possible. But should it?

When it comes to economic value, history has taught us that every financial transaction ultimately carries responsibility. Every payment has someone behind it. Every contract has someone accountable. Every mistake has someone liable. The danger is not that AI becomes capable of spending money. The danger is that society gradually accepts systems that spend money without a clearly identifiable human sovereign. And this is not merely a technological shift. It is a constitutional one. I believe when it comes to financial and other equally important transactions, guided autonomous AI is what is needed. Rather than pursuing completely autonomous AI, we should exercise a degree of control. Under the model of “Guided Autonomous AI”, the system enjoys extensive operational freedom whilst remaining strategically accountable to an identifiable human principle. AI is free to decide how to achieve delegated objectives. It is not free to redefine who is responsible. This distinction may appear subtle. In reality, it changes everything.

As such, in my view, when it comes to financial transactions, every AI agent will need a schedule of authority. Today’s AI systems are largely designed around prompts. We tell them what to do. We give them access to tools. We connect them to databases and APIs. But we rarely define what they are authorised to decide. I believe every significant AI agent should contain a mandatory architectural component that I call a “Schedule of Authority”.

Just as organisations define financial approval limits, signing authority and delegated responsibilities for employees, AI systems should operate within clearly defined boundaries established by their human principals. A Schedule of Authority might specify the financial limits AI may authorise, decisions requiring explicit human approval. It should specify actions that must never be performed autonomously. And the rules for mandatory escalation. Today companies pass Board Resolutions. Tomorrow Boards may approve:

Resolution 2028-14 - the Chief Procurement AI Agent is authorised to enter contracts up to £5 million under English law with investment-grade counterparties, provided settlement occurs through approved regulated payment rails and all transactions are recorded within the firm’s AI Authority Register. Artificial intelligence is rapidly becoming capable of negotiating contracts, allocating capital and initiating payments without continuous human intervention. The defining question is no longer what AI can do, but what it should be authorised to do. As AI evolves from an assistant into an economic actor, capability must never be confused with authority. Every significant AI system should therefore operate within a machine-readable guided autonomous AI schedule, ensuring that important legal, financial and strategic decisions always remain accountable to an identifiable human principal. Before any material action is executed, AI should first ask, not “Can I do this?” but “Am I authorised to do this?”

This is not simply a technical challenge - it is a constitutional one. Just as modern organisations are governed through delegated authority and clear accountability, the AI economy will require equivalent governance embedded into its architecture. The future will not be won by creating the most autonomous AI, but by creating the most trusted AI. In the age of agentic commerce, autonomy is a capability, accountability is a necessity - and human sovereignty must remain the foundation upon which artificial intelligence is built.

In a speech to Parliament in 2024, Andrew Bailey, Governor of the Bank of England, made a statement that should have alarmed every economist, policymaker and financial professional in the UK. He didn’t make headlines. He didn’t trigger emergency meetings. Instead, his words were filed away in the archives of central banking wisdom, largely ignored by the very people who should have been listening most carefully. Bailey said something that contradicts everything Silicon Valley is trying to build. He said something that challenges the entire premise of agentic US dollar. He said something that, if understood properly, reveals why the current trajectory of digital currency innovation is fundamentally incompatible with a functioning economy.

He spoke about how money must be singular. Not in those exact words, of course. Bailey speaks in the measured tones of a central banker, carefully hedging his statements with qualifications and caveats. But the underlying principle is unmistakable. A monetary system cannot function if it is fragmented into competing currencies with different yields, different settlement speeds and different economic properties. Moreover, this is not a controversial statement - it is, in fact, the foundation of modern monetary theory. It is why central banks exist; it is why nations have currencies; it is why the Bank of England has spent 330 years since it was established in 1694, enforcing the principle that there is only one pound sterling and not dozens of competing versions. Yet today, that principle is under attack, and the attackers are not foreign powers or rogue states. They are technology companies, venture capitalists and financial innovators who genuinely believe they are improving the monetary system and banks themselves. They are creating different types of payments - some with and some without a yield. They are building blockchain-based currencies that settle instantly and can do so 24/7 - i.e. no longer confined to the traditional banking working day. In doing so, they are potentially fragmenting money into a thousand competing variants but speeding up the velocity of money itself. And Bailey knows it’s a disaster.

Sir Issac Newton who used technology to save the pound

Source: X

The problem: money requires singularity

Let’s start with a simple question: what is money? After all, economists have debated this question for centuries. Yet there is one characteristic that all forms of money must possess: singularity. Money must be one thing - it cannot be two things at once. This is not a philosophical statement; it is a mathematical one because money serves three primary functions:

1. medium of exchange - you accept it in payment as you know others will accept it.

2. store of value - you hold it because you believe it will retain purchasing power.

3. unit of account - you use it to measure prices and compare values.

But here’s the critical insight: these three functions are in tension with each other. If money is a good store of value, people will hoard it (hold it rather than spend it) and therefore this reduces its effectiveness as a medium of exchange. If money is an excellent medium of exchange, people will spend it rather than hold it and therefore this reduces its effectiveness as a store of value. Hence, this tension is resolved through a principle that economists call the “velocity of money.” Money must circulate at a relatively uniform rate - that is, if all units of money circulate at the same speed, then the tension between store of value and medium of exchange is manageable.

The yield problem: when money becomes an investment

Imagine that the Bank of England has issued two types of pounds:

Type A: Regular Sterling

· no yield

· settles instantly

· used for everyday transactions

· velocity: high (spent quickly)

Type B: Yield-bearing Sterling

· 5% annual yield

· settles in 24 hours

· used for savings

· velocity: low (held, not spent)

Now, imagine that both are accepted as legal tender. What happens? Gresham’s Law tells us: “Bad money drives out good money.” But in this case, “bad” means “low-yield” and “good” means “high-yield.” Potentially corporations and individuals would hoard Type B (the yield-bearing version) and spend Type A (the regular version). With this in mind, let’s now trace through a concrete example: suppose you’re the Chief Financial Officer of a major UK corporation and you have £10 million in cash that you need to hold for operational purposes. You can either:

· hold it in Regular Sterling earning 0% yield

· hold it in Yield-bearing Sterling earning 5% yield

The choice is obvious. You move your £10 million to Yield-bearing Sterling. At 5% annual yield, that’s £500,000 per year in additional revenue. Why would you not do this? But now consider what happens across the entire economy. If every corporation, every institution, every individual with discretionary cash makes the same decision, then Yield-bearing Sterling gets hoarded and Regular Sterling gets spent. Hence, this creates a bifurcated monetary system where you have two different monies with two different economic properties - the central bank loses control of the money supply, interest rate policy becomes ineffective, tax collection becomes impossible and the banking system comes under immense pressure. This is not theoretical and is not a hypothetical scenario. This is potentially what some fear may happen when the US GENIUS Act is inevitably modified to allow yield pass-through on stablecoins - a change that regulators and industry observers expect within the next 18-24 months as pressure from US dollar stablecoin issuers mounts.

The velocity crisis

When money bifurcates into competing yields, velocity becomes unpredictable and it is one of the reasons that a number of central bank models, including the Bank of England’s core forecasting platform, COMPASS, have moved away from relying heavily on a stable velocity of money. The challenge is with competing yields, meaning velocity becomes chaotic - high-yield money is held (low velocity), low-yield money is spent (high velocity), the average velocity becomes unpredictable and hence the central bank’s model come under pressure. Furthermore, consider inflation targeting - the Bank of England targets 2% inflation where this target is based on the quantity theory of money: MV = PQ, where M is money supply, V is velocity, P is price level and Q is quantity of goods. If the central bank knows M and V, it can predict P (inflation). But if V becomes unpredictable because of competing yields, the entire framework collapses. The central bank might think it’s controlling inflation, but it’s actually flying blind.

Why Andrew Bailey is right (and why nobody listens)

Bailey has been warning about this for years. In his speeches, he has consistently emphasised the need for monetary singularity and that the central bank must maintain control over the money supply. Bailey is absolutely correct, but the problem is that he is fighting against technology. And technology, as we will see in this series, always wins. Moreover, Bailey’s warnings face a credibility problem - the financial industry has successfully framed stablecoins, CBDCs, tokenised money market funds and tokenised deposits as “innovation” and “progress.” Anyone who warns against them is portrayed as a Luddite, a technophobe or someone opposed to financial inclusion. But Bailey isn’t opposed to innovation. Indeed, in a recent speech he acknowledged the “potential benefits of digital technology to payments, for instance so-called programmable payments – ‘money with instructions’”. He’s warning about a specific problem: monetary fragmentation. And that problem is real, even if it’s unpopular to discuss. The other major challenge all central bankers face is the ability to track some of these digital payments, especially stablecoins since they move in amount of their respective economies. Currently, there is no means for central banks for or governments to monitor the quantity of stablecoins being withdrawn or deposited in their jurisdiction.

The historical precedent

There is a precedent for this problem, and there is a precedent for the solution. In 1696, the British monetary system faced a crisis. Coins had been “clipped” (physically cut to remove precious metal) and the problem was so great that almost half of the face value of coins in circulation no longer represented the metal content whereby leading to the currency being debased. The economy was in chaos - there were two types of coins in circulation: clipped coins (bad money) and full-weight coins (good money). Gresham’s Law was in full effect - full-weight coins were hoarded and clipped coins circulated. The solution came from an unexpected source: Sir Isaac Newton, the greatest mathematician and physicist of his age, was appointed Master of the Mint in 1696. Newton understood something that most people didn’t: the problem could be solved through technology. Newton introduced “reeded” coins - coins with ridged edges that made clipping impossible to hide. These coins were so technologically superior to clipped coins that they immediately became the only acceptable form of currency and within months, clipped coins disappeared from circulation. Thus, Newton used technology to enforce monetary singularity. But here’s the twist that we’ll explore in next week’s article: the same technology that once enforced singularity is now destroying it.

The central banking paradox

This reveals a fundamental paradox in central banking. Central banks have always relied on technological superiority to enforce monetary singularity. Newton used reeded coins, modern central banks use digital signatures and cryptographic verification. But now, the technology that was supposed to enforce singularity is being used to create fragmentation. Blockchain technology allows anyone to create competing currencies - cryptographic verification allows multiple issuers to create competing stablecoins. The same tools that central banks used to enforce control are now being used to undermine it. This is the core problem that Bailey is grappling with; the technological foundation of monetary control has been inverted. Technology that was once a tool for enforcing singularity is now potentially becoming a tool for creating fragmentation.

What comes next?

This series will explore a paradox at the heart of modern monetary policy. It will show how Andrew Bailey’s arguments for monetary singularity are theoretically sound but practically impossible to implement. It will demonstrate how technology has made singularity obsolete. But first, we need to understand the historical precedent; we need to understand how Newton solved the problem of competing currencies; and we need to understand why his solution, elegant as it was, cannot work in the digital age. Next week: “They clipped the coins: Newton’s Great Recoinage and the birth of trusted money”. We will examine the Great Recoinage of 1696 in detail. We’ll see how Newton’s technological solution enforced monetary singularity for 330 years and we’ll begin to understand why that same technology, the power to create superior money, is now creating the opposite problem.

Series Overview

Andrew Bailey, Governor of the Bank of England, has warned repeatedly about the dangers of monetary fragmentation. This series explores whether his warnings came too late.

This is Part 1 of an 8-part series exploring “The case for the singleness of money”. Each week, a new article will build on the previous one, exploring why monetary singularity is essential, why it is being destroyed and what comes next.

Coming in this series:

Part 2: Newton’s great recoinage and the tax acceptance mechanism

Part 3: Why yield-bearing bonds could never be money (the technical barriers)

Part 4: How the GENIUS Act proved Gresham’s Law in real-time

Part 5: Why yield-bearing money destroys the banking system

Part 6: How tax payments became the ultimate monetary weapon

Part 7: The agentic USD threat to sterling sovereignty

Part 8: The twisted ending: why singularity is dead

*Jonny Fry is a director of London Digital Escrow

An AI agent may select a counterparty, negotiate terms, interact with a smart contract and authorise payment. Yet it is not generally recognised as a legal person, therefore its outputs need to be attributed to a human being or organisation. The UNCITRAL Model Law on Automated Contracting, adopted in 2024, supports contracts formed or performed through automated systems, including AI and machine-to-machine transactions. It establishes rules for attributing automated outputs and addressing unexpected outcomes without requiring the system to possess legal personality. And the emerging direction is clear: autonomous execution does not remove human or corporate accountability.

Rome’s architecture of delegated commerce

Source: London Digital Escrow

Roman law distinguished between people who were legally independent (“sui iuris”) and those subject to another’s authority (“alieni iuris”). The “paterfamilias” was the legally independent head of the household and principal holder of its property. He was not a ‘beneficial owner’ in the modern legal sense but can be compared cautiously with a principal asset owner, trustee, company or family office. Nevertheless, commerce required others to manage farms, ships and businesses and so the peculium was a fund placed under another person’s practical administration whilst remaining connected to the principal. The Roman jurist Gaius, Institutes, Book IV, sections 69 to 74, explained that liability depended on the authority granted; where the principal expressly ordered a transaction or appointed someone to operate a business or ship, liability could extend beyond the peculium. In other circumstances, recovery might be limited by reference to that fund. Justinian’s Institutes, Book IV, Title VII later restated this graduated approach and, in today’s climate, the resulting lesson is clear:

The greater the authority given to an AI agent, the greater the potential exposure of the principal behind it.

Four questions for AI transactions

Source: London Digital Escrow

In the case of wallets, a separate wallet does not itself determine authority or liability; asset segregation, attribution and recourse remain distinct questions.

What modern cases tell us

In the case of Quoine Pte Ltd v B2C2 Ltd, algorithms entered cryptocurrency trades after a platform failure activated a fallback price. The Singapore Court of Appeal treated the deterministic programs as mechanisms selected by their human operators, rather than inventing a separate legal mind for the software. The case suggests that using an automated system does not necessarily allow its deployer to disown a resulting contract, with these limits of unchecked automation having been exposed by US global financial services firm, Knight Capital. In 2012, faulty software sent more than four million erroneous orders in forty-five minutes, producing losses exceeding $460 million. Unsurprisingly, the SEC found inadequate safeguards, testing and supervisory controls and imposed a $12 million penalty. The lesson is that an AI peculium needs more than a capped wallet - it requires transaction limits, cumulative exposure controls, approved counterparties, price tolerances and an effective suspension mechanism. Another example can be seen in the case of Moffatt v Air Canada, where a tribunal held the airline responsible after its chatbot gave a customer inaccurate information about bereavement fares. These decisions are not universally binding but illustrates that a business cannot assume its AI interface is legally separate from the organisation deploying it. Meanwhile, the Ooki DAO litigation has provided a related warning - a US court held that a decentralised organisation could be sued as an unincorporated association and treated as a person under the Commodity Exchange Act. Similarly, the SEC’s 2017 DAO Report emphasised that regulatory treatment depends on economic reality, not technological terminology. A wallet, smart contract, DAO or SPV may segregate operations but it cannot automatically override securities law, sanctions obligations, consumer protection or fiduciary duties.

Why England and Wales could lead

The Law Commission has concluded that the law of England and Wales can generally support smart legal contracts without wholesale statutory reform. It also identified areas requiring further attention, including deeds, jurisdiction, interpretation and remedies. The Property (Digital Assets etc) Act 2025 has further confirmed that digital or electronic assets are not prevented from being objects of personal property rights merely because they fall outside the traditional categories of things in possession and things in action. That improves certainty over digital property but it does not determine who is responsible when an AI transfers it. The commercial opportunity is to combine existing contract, property, trust, company and financial-services law with a technically enforceable AI mandate.

Building a modern peculium protocol

A modern AI peculium should be a legal and technical control framework where it would identify the principal and define the AI’s objectives, permitted assets, counterparties, jurisdictions and transaction types in a digitally signed mandate. Capital could be placed in a segregated wallet or account and smart-contract permissions would impose per-transaction and cumulative limits. Borrowing, pledging assets, using an unapproved protocol or exceeding a threshold would require human authorisation and instructions, data sources, decisions and transactions would be logged so the agent’s conduct could be reconstructed. Lawyers, trustees, directors, compliance officers or regulated custodians could validate authority, approve exceptional actions, preserve evidence and activate emergency suspension and insurance could then be priced against a measurable mandate and maximum exposure. Furthermore, ring-fencing would still have limits as it could not automatically exclude claims arising from fraud, negligence, sanctions breaches, regulatory violations, fiduciary misconduct or express authorisation by the principal. This all echoes Rome where liability depended not only on the assets allocated, but also on what was ordered, who benefited and how much authority had been granted.

Source: London Digital Escrow

The EU AI Act requires proportionate human oversight for high-risk systems, including the ability for authorised people to intervene or stop systems that are not operating as intended. The UK’s principles-based framework emphasises safety, transparency, accountability, governance and redress; both approaches point toward controlled autonomy rather than artificial personhood.

Autonomy without unaccountability

Roman law did not solve AI governance two thousand years in advance. It did, however, recognise that commerce could be delegated without leaving authority and liability undefined. AI agents do not need fictional personhood to contract and move value - they need intelligible mandates, restricted access to assets, transparent records, effective human control and credible recourse. Jurisdictions that build this architecture first could provide the trusted infrastructure through which autonomous commerce, machine-to-machine payments and AI-managed wealth operate at scale. Rome’s enduring lesson is that delegation becomes commercially useful only when authority, assets and accountability have clearly defined boundaries.

Source: X

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