Tesla’s Automation Breakthrough Signals Stablecoin Surge

Professional Capital Management founder and popular investor Anthony Pompliano thinks that the automation proposed by Tesla led to a key catalyst for stablecoins in the automotive public. He made the comments in a speech at Tesla’s hotly anticipated Robotaxi Day event, where he said that many of its new technologies, such as self-driving cars and humanoid robots, could pave the way for cryptocurrencies to flourish even further now that people’s lives are becoming increasingly operated by machines.

Automation and Currency: A New Intersection

Pompliano argues that Tesla’s cutting edge technology is at the fore, including its driverless vehicles such as Cybercab and Robovan — with the announcement of his humanoid robot Optimus. This isn’t just cheaper AI; it’s a momentous change in the kinds of transactions we might start to see between machines and people.

Pompliano believes the future is now, with stablecoins (types of digital currency that peg their value to fiat currencies like USD) serving as rails for transactional systems between machines. He sees stablecoins as a natural fit for machine-to-machine payments — ideal due to their relative price stability, and because they can process transactions fast-cross-border.

“Neither people or machines will want to spend their Bitcoin,” Pompliano told Yahoo Finance. If Bitcoin grows deeper, they will go to the store & hold it. Instead, they will use digital stablecoins as the medium of exchange. In other words, Pompliano is saying that Tether (USDT) or USD Coin (USDC), stablecoins in particular, will act as the digital checking account of the automated economy Tesla is helping to develop.

The Rise of Stablecoins in an Automated World

Increasingly at the forefront of automation (autonomous vehicles, robotics and everything in between), Tesla illustrates one further attribute necessitated by a new respect for robot-kind: currency programmable to operate on machines. Stablecoins are a natural fit for this machine-driven future because they remain stable, which eliminates much of the volatility seen with other cryptocurrencies like Bitcoin.

Stablecoins have already made significant progress in this area with their convenient application for international payments because they do not require the use of traditional banking systems that are slow and costly. One of the analogies Pompliano makes is that stablecoins are like E-Z Pass systems in toll booths, which forever changed how transactions were settled while vehicles continued down the road. In a world where machines (like Tesla & autonomous cars) communicate and transact, the stablecoin could emerge as a default for transactions in such an economy.

Implications for the Financial Industry

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Pompliano’s forecast also implies that the banking sector should be more concerned with stablecoin development, especially if automation continues in its rapid rate of ascension. Although fees in traditional financial systems take time to process and are relatively expensive, rapid low costs are offered by digital currencies. Banks are already considering the use of stablecoins to deploy these digital assets on their payment networks.

As Tesla’s robots improve, and as Tesla becomes more of a robot company than they already are (tens of thousands in a year) the need for machine-to-machine transactions that process near frictionlessly with little to no cost will become predominant. Pompliano theorizes that this vacuum will be provided for by stablecoins, which can deliver the scalability, security and low-cost functionality needed to contain automation of transactions.

“My guess is there will be a large uptick in usage for stablecoins as a result of these technologies coming into production,” Pompliano said, emphasizing that while Bitcoin may continue to serve as a store of value, stablecoins will likely dominate the realm of everyday transactions.

A New Frontier for Digital Payments

The credit market for Tesla’s future all-electric world involves a different type of digital currency that could be critical to the ongoing development of stablecoins. Tesla has significantly more healthy financials than other crypto-funded projects and it is also by all appearances a machine-pay-for-machine-world kind of shop, so this begs the question: are stablecoins digital currencies for traditional finance that were paradoxically born in Web 3 or are they actually destined to become the most relevant paying vessel in these new times?

Stablecoins are specifically well-suited for this, given their stable value which is more in line with what the average person needs to pay bills, buy things day-to-day. This stability is at an odds to Bitcoin’s high volatility that even though may serve better as a long-term store of value rather than everyday transactional currency.

Conclusion: A Future Worth Watching

With Tesla pushing forward economic boundaries thanks to Pompliano, a stablecoin-dominated machine economy might become an eventual reality. As we see increased adoption of robotics, autonomous vehicles and similar automated systems the dynamics around digital payments will no doubt also change with stablecoins set to lead as currency minted for these innovations. As Tesla and their ilk blaze new paths with digitized currency, investors along with the financial industry will also be keeping a close watch over these advancements.

”Stablecoins will most likely see a huge increase in their usage once these technologies are put into production, and this is my guess. Which one world will be for storing economic value from Bitcoin, and the other be a fast spendable new kind of digital stablecoin? Some of these digital rails allow for faster and cheaper transactions, on which stablecoins are built.” Anthony Pompliano.

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