Tokenization, Stablecoins & AI: Here, But Stuck in 2nd Gear
Leaders ignoring employees' AI fears are throwing on the brakes
Thanks for reading the “Cashless” newsletter, an insider’s view on Asia’s fintech, CBDC, and AI for anyone striving to understand “the Asia Century.” I’m Rich Turrin, and these are my hard-hitting insights designed to educate and inform. Subscribe to get these emerging trends directly in your inbox every Sunday. Every week, I scan thousands of articles to find only the best and most valuable for you. Subscribe to get my expertly curated news straight to your inbox each week. Free is good, but paid is better.
Topics:
Tokenization Is Here – But 85% of Institutions Predict a Slow Rollout
Tokenization: Stalled by an Adoption Gap
Why Klarna’s Stablecoin Matters Less Than You Think
S&P Downgrades Tether to Lowest Level Due to Risky Assets and Lack of Disclosure
The AI Enthusiasm Gap Leaders Ignore Employees Aren’t Excited — They’re Anxious
NEW The AI Trust Gap: Why China Will Win the AI War Premium subscribers only. People cannot be forced to use AI, trust drives mass adoption
NEW Tokenized Deposits: Banks’ Answer to Stablecoins Premium subscribers only. Read how banks are not giving up control of payments without a fight.
NEW The AI Bubble Bursts: Implementation Results Reveal Difficulties Premium subscribers only. A special collection of papers that confirms the AI bubble is ready to pop.
Bonus Read ✦ World Bank: Developing Nations to Rely on Open Source AI, Handing China the Win.
Happy Sunday!
This week, we talk about “speed,” which is why I’m leaning on a childhood favorite for today’s artwork. “Speed Racer,” also known as Mahha GōGōGō in Japanese, will help get us focused on the topic.
Speed is a topic of critical importance to tokenization, stablecoins, and AI.
The problem with all three is that the speed of the transformation they are bringing is slower in reality than portrayed by the hype.
Tokenization
Two articles cover tokenization today, and while it is welcomed, even by large financial institutions, the pace of adoption is slower than advertised, and few are optimistic about it speeding up.
The principal reason is that tokenization standards are still lacking, as are local and cross-border regulations.
Can you think of an industry more sensitive to regulations than securities?
Stablecoins
To read the stablecoin propaganda, you’d think that Speed Racer himself was driving the stablecoin car.
Stablecoins are also facing mounting problems of differing types that will slow their progress.
Stablecoins still have real problems to solve that are not just regulatory, but trust-based based as we see with Tether’s downgrade.
And while the news that Klarna is launching a new stablecoin will make some think that stablecoin use is progressing at blinding speed, the reality is very different.
Anyone can launch a stablecoin; it’s like a race car starting in pole position; it’s finding the users after a long, drawn-out race that is the problem.
AI at work
Turning to AI, we face another problem involving speed, this one hinging on the gap between executives’ expectations for fast AI adoption by their employees and employees who are anxious about job losses.
Executives are dreadfully out of touch with their employees and this “enthusiasm gap” will slow AI adoption.
Bonus Read
In the “Bonus Read” section today, I ran an article by the World Bank that shows how the developing world is increasingly turning to open source AI to avoid high subscription costs.
This is playing directly into China’s strengths, and China’s open source AIs are now the world’s most downloaded.
Video
Finally, a quick video shot at the Singapore Fintech Festival, where I talk about QR-code payments and how they are going global.
You may notice that some of my past articles are getting paywalls and that I am producing new premium content. I’ll do my best to keep these weekly newsletter articles open to all for a few weeks, but some may eventually get paywalls.
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To all subscribers, my heartfelt thanks for opening your inbox and being part of this journey!
Rich
PS
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Tokenization Is Here – But 85% of Institutions Predict a Slow Rollout
Regulations Remain the Only Real Roadblock
Tokenization is here, and it works with 91% of custodians citing improvements in efficiency and transparency, and most early adopters are realizing substantial benefits.
The bigger question is how long we will have to wait, when 81% of early adopter individual investors and 85% of institutional investors say adoption will be slow.
The Broadridge Tokenization Survey is refreshingly hype-free and shows just how far we have to go……
Tokenization: Stalled by an Adoption Gap
Why Issuers, Sell-Side & Investors Can’t Align
The MAS and the UK’s FCA look to close the gap between what investors want in tokenized assets and what issuers are building to help tokenization go beyond crypto and go mainstream.
This is a follow-up on yesterday’s article on tokenization, which showed that 85% of institutions are predicting a slow rollout (Article above).
Why Klarna’s Stablecoin Matters Less Than You Think
What does matter is payment fragmentation, a silent killer of convenience.
Klarna launching a stablecoin is today’s breaking news, but the reality is that with hundreds of new stablecoins launching, it doesn’t really matter, and I have to ask why anyone should really care.
Read on to see why Klarna is showing how payment fragmentation will be very real.
S&P Downgrades Tether to Lowest Level Due to Risky Assets and Lack of Disclosure
In a dangerous move, the US is creating two classes of digital dollar
S&P Global Ratings downgraded Tether, the world’s largest stablecoin, to its lowest rating, “Weak,” showing a harsh verdict and little faith in the world’s largest stablecoin to hold its peg.
New Premium Content ✦ The AI Trust Gap: Why China Will Win the AI War
People cannot be forced to use AI; only trust can drive mass adoption
A striking new Edelman survey shows 54% of people in China embrace the growing use of AI, while just 17% of Americans feel the same.
Edelman’s poll surveyed over 5000 respondents in Brazil, China, Germany, the UK, and the US and shows that developing nations embrace AI far more than developed nations.
New Premium Content ✦ Tokenized Deposits: Banks’ Answer to Stablecoins
Banks won’t go down without a fight!
Dear Premium subscriber, thanks for your support! We are rapidly heading toward a world where wholesale transfers will use either CBDC, Stablecoins, or tokenized deposits.
Let’s take a look at some of my recent writings on tokenized deposits to see how they are in use now and are banks’ way of fighting back.
New Premium Content ✦ The AI Bubble Bursts: Implementation Results Reveal Difficulties
A special collection of papers that confirms the AI bubble is ready to pop.
Dear Premium subscriber, thanks for your support! The question on everyone’s mind right now is whether we are in the midst of an AI bubble that is ready to pop.
Bonus Read✦ World Bank: Developing Nations to Rely on Open Source AI, Handing China the Win
The World Bank shows that AI is gaining momentum in developing countries and driving growth opportunities.
This is great news and tracks with surveys showing high levels of enthusiasm for AI throughout the developing world.
The problem for Silicon Valley is that the developing world isn’t planning on paying for ChatGPT, Anthropic, or Google LLM subscriptions.
Instead, they are looking to open source, which plays directly into China’s hands as the world leader in open source AI.
Just this week, a Hugging Face-MIT report claimed a “rebalancing of power,” in AI markets.
Chinese open source models reached 17.1% of global downloads, higher than the US’s 15.7% share.
China not only has more open source models available, but their quality is second to none.
Another attraction is that China’s models require far less computing power.
Chat GPT and others in Silicon Valley, who were assuming that their closed models would capture global revenue streams, should be worried.
The market is slipping away from them quickly, and with it, Washington’s goal of US AI dominance.
Open-source technologies are helping democratize AI participation—and that’s fundamentally good for the developing world.
Whose open-source AI is used is up to the market, but the balance is tipping in China’s favor.
👉How to read this report: my recommendation is to go straight to the section on AI models, Chapter 4, page 57.
My Tencent Interview:
I did a series of interviews with Tencent at the Singapore Fintech Festival that talked about QR code payments. Here is the short 4-minute version. The actual answers were much longer!
Questions:
My takeaways from the Tencent booth at SFF
What has changed in Singapore payments since I lived there in 2017
What stage is China at with mobile payments
What do I think of QR code payments going global?
Why are QR code payments so popular?
What is the future of QR code payments?
Hot Topics for Premium Subscribers only
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Each week, I distill this ocean of information into five concise, high-value reports, sharing the most essential knowledge you need to stay ahead.
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Here’s what you’re missing out on this week in the Premium Subscriber-only section below:
Two grey market reports covering the AI bubble!
eBook on AI in Investing
Three papers on stablecoins that show how “The Devil is in the details.”
And that’s just a selection of today’s cache of insightful PDF reports! You’re also missing the infamous Chart of the Day, which today covers: “The Geographic Split on AI Addressing Societal Issues.”
