This article refutes the views put forward by technology leaders, such as “tokens/computing power/energy becoming the new currency in the AI era,” by drawing from the fundamental principles of monetary economics. It introduces Fisher’s transaction equation (MV = PQ) and the three functions of money: store of value, medium of exchange, and unit of account. The article argues that tokens and computing power are essentially “factors of production” rather than currency, as they lack intrinsic scarcity and a balanced supply-demand mechanism. Instead, it proposes that the most practical global currency in the AI era would be a stablecoin tied to the US dollar. Such a stablecoin could meet the needs of AI-driven economies for instant settlements and programmable payments, while also benefiting from the credibility and stability of the US dollar. The article also discusses potential improvements to the US dollar-based stablecoin system, such as the possibility of Hong Kong issuing its own dollar-pegged stablecoin, as well as the role decentralized stablecoins could play as a long-term supplement. In conclusion, while AI accelerates the digitalization and programmability of currency, it does not undermine its fundamental nature. Whoever gains control over the stablecoin market will have a competitive advantage.
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