Digital IDs in DeFi Threaten the AI Crypto Narrative

According to Cointelegraph, the U.S. Treasury is considering introducing digital ID requirements into DeFi smart contracts as a way to combat money laundering.

The crypto community has already pushed back with some pretty clear counterarguments. A good example comes from well-known blockchain investigator ZachXBT:

• Scammers can easily bypass such checks, since verified accounts are routinely bought and sold.
• Users are exposed to risks of personal data leaks.
• There’s no one to hold accountable for negligence when those leaks inevitably happen.

But I think there’s another angle here that almost no one is talking about.

• Seven or eight years ago, the idea of combining IoT and blockchain was trending - imagine your smart fridge automatically ordering and paying for groceries when you run out.
• Last fall, there was a lot of hype around AI agents that could earn crypto for their services and reinvest it into their own development - without human middlemen taking the biggest share.

Back then, the main concern was that traditional finance would never allow non-human entities to own and manage money. Crypto was supposed to be the sandbox where we could experiment with such rules however we wanted.

But as financial institutions integrate deeper into the crypto space, they inevitably bring their own rules along. And it’s hard to imagine they’ll ever allow smart machines to independently own and control even digital assets like cryptocurrencies.

To me, that looks like a bearish signal for the whole AI-agent narrative in crypto. Probably a good time to offload FET, VIRTUAL, AI16Z and similar tokens.

Don’t forget: you can always swap them for any other cryptocurrency at the best rates on rabbit.io.