AI Agents Can't Use Banks. Why That Changes Everything.

Welcome to a new episode of Yahoo! Finance's Opening Bid Unfiltered Podcast. I'm Yahoo! Finance Executive Editor Brian Sazi. So jazzed up for my next guest. We're going to dive into all things. That's just a cool topic I want to talk about. I can do whatever I want. It's my podcast. Frederik Gregaard, Cardano Foundation CEO. Good to see you. I've never met you before, but welcome to Yahoo! Finance headquarters. For those not familiar with Cardano Foundation, what is this? So the Cardano Foundation is a Swiss non-for-profit foundation who supports the nation state of the Cardano ecosystem, which currently has about 8 to 9 million inhabitants who have full voting and is managing a treasury of 1.5 billion ADA. And what's quite unique about it is that we don't control the blockchain. We don't pay for the blockchain. We support and enable the blockchain around mainly operation resilience. So how do you walk back a public commissioner's blockchain if something happens, right? The second part is regulatory clarity and education. How do we get to a point that people understand the power of blockchain and not just the power of crypto? And last but not least, how do we enable real mass adoption? So think about how do we get a billion or two billion people to actually get the benefits of blockchain, even though they might not actually know what blockchain is. Who created the foundation? So the foundation was originally created by the original founders of the Cardano ecosystem. And the most vocal of them, of course, today is Charles Hodgkinson. I love all him on X, yes. And then Ken Kodama-san and a few others. And again, what's quite unique here is that with many of the old Ethereum founders, you see them very engaged in the different types of non-for-profit foundations. And here from the start, they said, okay, we run commercial companies ourselves to generate a profit and get the product to market fit of blockchain, right? But we also need a non-for-profit. And that means that they're actually not a part of the governance of the foundation, which is quite unique because the timeframe in which we optimize on is different. The Cardano Foundation fights in a 10 to 20 year timeframe. It's really about the long marathon of blockchain and where the commercial companies, of course, fight more about, you know, next quarter, next month. And that is different when you optimize, but it also makes it extremely powerful and extremely resilient. How did you find your way to be the CEO of this? Yeah, that's a fantastic question. So there's two stories I normally tell about you because you're coming from a trading floor. I'll tell you the origination story, right? So I came out of the army, I saved up a little bit of money, but it was quite clear for me with the political situation and having been deployed that I needed some more education and I needed to go away from the army. So I started on a business school and they were teaching about macroeconomics, specifically around oil and trading the contango. And, you know, being a practical guy, I walked into my local bank, my family bank, and I said, I need to trade an oil future. And the clerk looked at me as I was, you know, completely insane and started laughing and said, you all know you're not happening, you know? And I said, I want to speak to the manager. And they were looking at this student, you know, who looked a little bit strange because, you know, just coming out of the military, you have different eyes, right? And I said, yeah, I'm not leaving before speaking to the manager, right? And the manager said, well, you know, you do not have the qualifications, the access, and said, well, I can cover the margin for my future trade. So let me in, right? And it ended escalating up all the way up to the executive of the local bank, right? And it became very clear to me that it doesn't matter really if you're born in a Western country or if you're born in a non-Western country, if you're born in the right family, there is people who have access and has rights and the people who doesn't. So I really sort of started thinking about what would it mean if we democratize access to capital markets, if we create equal opportunities and by that also create distribution. So how amazing would it look like that if, you know, capital markets or financial market infrastructure was servicing all people on earth and not just a few. When did you catch the blockchain bug? So that came way later, right? So that was around 10 years ago when the Ethereum Foundation was incorporating in Switzerland and we had another amazing company who was also still around called Bitcoin Swiss, which is a great broker and OTC broker, right? And they needed to have a bank account. It was difficult for them to get a bank account. And at that time I was building banks and robo-advisors and so on, but I was not allowed to give them a corporate bank account. They could run salaries in fiat on due to their exposure to blockchain. So I had a deeper look into it and I got really excited about Bitcoin, but also became clear to me that they needed banking services like other people who's cut away from the markets. So I helped them to get some banking services and get some early accounts. And I got really, you know, I got really deep into the rabbit hole and was really looking at this and thinking about, you know, when you're used to building banks and, you know, brokers and exchanges, and you suddenly saw a piece of code who were able to basically settle in T plus zero, which back then was, right, really amazing, right? Nobody even heard of that before. Yeah, it was unheard, right? Atomic swaps, you know, just this idea that you could, you know, exchange value at the exact same time and then basically not have counterfeit risk. So there was a lot of these concepts with Bitcoin was introducing and it seems like it was working, which really got me thinking about, you know, how awesome wouldn't it be in Trafi if we started getting some of that in and how much would that not help, you know, the investors and the people actually operating in this when we take away some of these, you know, bottlenecks, right? And yeah, so after that, you know, it became sort of a journey, right? Then I moved over to a PWC where I built a blockchain center and a merchant tech center. How do you build a blockchain center? What goes into that? Accident. Accident and timing, right? So we had something which was called an experience center. So it was an emergent tech center, which was a concept from PWC. So we were, you know, just north of a hundred people, engineers, designers, product developers, business people, consultants. And, you know, at that time, there was a company which still exists, which is an amazing company as well called Swiss Quote. This is a Swiss bank. And they, in the Bitcoin run of that year, suddenly the Bitcoin exposure they had became material on the balance sheet. And I was already teaching about the advantage of blockchain to our in-house auditors, but they were not that interested. But if FINMA, the local regulator, suddenly say you have a material risk on the balance sheet and PWC is the auditor, it becomes interesting. Yes, very quickly. So they called me, right? And I said, you know, I need help, right? Can you explain to me what this is? And there is some audit principles you need to do to establish, you know, the amount and the control and stuff like that. And that did not exist for crypto because crypto is slightly different. You couldn't just get an audit statement if you're holding this in cold storage yourself, right? So how do you prove that you have control over it and so on? And basically what we did there is what all auditors today are using in order to audit anybody with crypto exposure out there today. So banks and brokers, asset managers, they're actually using that methodology. Around the same time came this big project with Facebook Libra. Yes, there's a name from the past. Yeah. Yes. So I was also involved in that project with PWC and that was super interesting. We were actually, what many people don't know, we were actually only two weeks away from giving them the full license to do this, two weeks. Wow. And what's kind of funny when you kind of look back into history what actually happened was presidential election. So if you look at the timing, the presidential election happened, new president, he decided it should be a different custodian. You know, favors has to be given out, right? There's a little bit more to the story than that, but they changed the custodian setup. And then from the Swiss side, we basically said, then we do not feel comfortable. So this was not me and PWC, right? This was the regulatory framework in Switzerland basically said, yeah, well, then we don't feel comfortable anymore for that setup. But it was two weeks away from happening. Could you imagine if that had happened back in the days, right? It would have been huge. Yeah, it would have been billions of people being on actually a type of stable coin, which we haven't seen yet, right? Because the stable coin was constructed slightly different, more like a basket currency than what we see with the USDC and UCT today, right? And then I had the opportunity also to participate in the first licensed asset managers introduction into a Bitcoin exposure, an ETH exposure. So we also did that out of my team. And then we did the two other banks, which you're probably familiar with, which is called Signum and Seba. Seba now called Amina. So the two first blockchain banks were also, I was a part of that as well in PWC. And we did the first altcoin implementation with something back in the days who doesn't exist anymore. It's called Falcon Private Bank. So it was the first fully regulated bank who had a full altcoin exposure. You mentioned staple coins. And I was just, this is top of mind because I had a great conversation with Circle CEO Jeremy Lair on, obviously they're the main player in staple coins. Are they really becoming core to the financial system? So I think there's two ways you can look at this, right? There's the first way and just purely look at the volume. So basically look at how many dollars is back in USDC and USDCX, right? And the other way you can look at it is saying, hmm, what does the financial system actually need right now? If you look at the TradFi system, because stable coins, even though they are becoming significant in terms of the amount of dollars which is backing this, they are still very insignificant in the grander pool of TradFi. And what we are seeing right now, specifically on both Arbitrum, Cardano and others right now, I'm representing of course Cardano, is we see that there's a lot of use cases for our stable coins, which is not impacting TVL in the same way as we see today. And what I mean about it is, for instance, we have a use case in Germany right now called Misumi, where we have several hundred German mid-size companies, you know, when I say mid-size, we're talking about Lufthansa and we're talking about that type of company who's using agentic AI for different purposes. Now what's happening underneath is the security layer and the collaboration layer is actually Cardano. So there is an identity, so the AI has an identity. So that which allows you to know that if I'm getting data from you which is outside my corporate entity, right, so it's outside data, right, I know who you are and you can prove who you are, it's called a VC, a verified credential, right, without giving me the background information. Plus when you have two agentic AIs who are speaking together, right, one potentially has more computing power than the other one, so one easy way of ensuring that the one with the most computing power doesn't, you know, do a billion prompts and, you know, circumvents the security manners to get data it's not supposed to have is to do a microtransaction in a Mika-compliant stablecoin, right? And secondly, because we are sharing data among companies, right, you want to have an incentive model, always follow the money to figure out what the incentives are, right? And these transactions is also happening in a Mika-compliant stablecoin. Now, these type of transactions, if you look at the average transaction size on USDC or Tether, for instance, right, you see they're really, really high. But now you see the next generation of need for types of settlement is coming with agentic AI because what's really happening is an agentic AI cannot have a bank account, right, but it can have a non-custodial wallet, right? And what we're also seeing today is that we are delegating power to agentic AIs to do payments for us and do other things. But if something goes wrong, who's at fault? Who is at fault? Because I talk to a lot of tech CEOs that are developing, Mark Benioff, I mean, he's sitting there developing these AI agents. Like you were the first person that I'm, I'm going to come away after this conversation, like, holy ----, like these AI agents are, I mean, they're proliferating, they're everywhere now. And like, who is thinking about the risks from these agents? We are. I don't hear anybody. We are. But we are blockchain, right? So you don't normally see it, right? You don't, you know, when you think blockchain, you think crypto assets, you know, you think, you know, provenance, you think, you know, all those kinds of things. But you don't necessarily think about the security layer and the identity layer, which is needed for these agents to be held accountable, but also for you to delegate a mandate to them and withdraw a mandate, right? And keep them in balance and checks, right? And I think this is the next generation of use cases on blockchains. This is exactly it, right? And this is going to, you know, it's our Google Maps moment from web two is actually coming right now. A lot of people say, oh, it's the stable coins, it's Bitcoin, and I'm still a very large advocate of Bitcoin, right? But I do think that what we're going to see with, you know, robots and AI, basically using blockchain for collaboration, security, and identity, right? It's going to be a massive moment. As someone so plugged into agents, you know, I've been asking everyone this, so I want to put it to you. Yeah. How impactful are, will agents be to like global economic prosperity? You know, I talk to some folks who are like, six months from now, I mean, we're going to get a big spike in the unemployment rate. Other folks would say, AI agents are going to be job creators. Like where do you fall? So I'm probably representing one of those small strands of humanity who still fight for the power of people. I truly believe that we need to find a deeper meaning for people to exist and for people to collaborate. And that's what attracts me to blockchain. And that's what attracts me specifically to Cardano. It's this type of collaboration layer. This new type of social system. And I think that when we look at AI, you have two options. You either have a direction which goes towards more like a Skynet, right? That, you know, most data lies in one common database and it creates incredible wealth and incredible benefits for medical applications and so forth. But the other one is an option of decentralization and distribution where we've built systems which allows us to have bespoke AI agents. And they might be extremely good at other things as well, right? But they are restricted by the blockchain to do certain things. And that allows us to still have small and medium-sized companies, which is actually what the financial system and all economy is built on, small and medium-sized companies in nearly all countries around the world. But I do think in the next 10 to 15 years, you're going to see companies who is valued in the billions, if not even trillions, with less than 10 employees. Less than 10. I believe that. I see that where it's going. I think companies, these agents are really causing a lot of like executives to go back and like rethink their cost structures, especially if they're public. And if they don't rethink them, they're going to get penalized in the markets. Completely. And I mean, again, I'm going back to one of these agents or agent cases we have is called Masumi or Sokozumi. We can put a link into it, right? And what it's able to do is amazing, right? So I asked it to do a full brand analysis of the Cardano brand, including the marketing and put numbers on it. And you really see how one agent, like a project management agent, delegates to 15 other agents in a Gantt chart, right? And every time it delegates, right, there's a digital identity, which is verified on Cardano, which is ensuring that it's to the right two agents, right? There's a microtransaction in Amica compliance stable coin happening, right? There's information sharing behind paywalls, right? There is even some of them are able to take Yahoo finance data and tick data, right? To basically build it up. And then not like you see with the models from like a chat TPT or Gemini today, right? It's not like in five minutes or one minute, even you have an answer, right? This took hours. But what you get is you get a full data dump in an Excel spreadsheet format, right? Which you can then go deeper into. You get a full PowerPoint, you get a full research paper down, right? Everything is verified and you can go all the way back into the steps. And that type is just, is blowing my mind, right? Because, you know, of course I'm willing to pay for this, right? And of course I'm willing to also, when I do interviews with new marketing agencies, I will use this for them and against them, right? Because suddenly it allows me to suspend wider in the blockchain use cases, but also in what is the real impact out there. In this role, how do you grow the foundation? Like what are your mandates over the next few years? So we think a lot about blockchain for good. Any new technology gets weaponized. So a lot of what we've been doing is trying to do use cases, such as FWeed, which is a tokenized weed down in Argentina, right? To planting a million trees and putting every single tree's regulatory information, but also carbon footprint on the blockchain or to how to ensure the security about AI agents in Germany, right? So a lot of what we do is really about blockchain for good. Can we show people that blockchain is not just a weapon? But if we go in and judge what's good and bad, you know, we're back in the old system. So what I'm trying to really do is I'm trying to, instead of being the judge, we are trying to ensure that we show people the possibilities of the blockchain. The other part is incentives. So when you have a blockchain who cannot just print money as in the old world, right? There's no central bank who just prints money because there's a lot of blockchains who does that today, right? Again, I always say, follow the money and you figure out the incentives, right? But Carano is very aligned to Bitcoin. I mean, he says inflation guaranteed setup, where there can only be an X amount of data ever minted out there, right? And we think a lot about, so what is the incentives we need to pay for developers, for miners, with us called estate pool operators, right? For the security of the blockchain, right? And what is the income of the blockchain? And how do we get to an equilibrium between the income and the cost of the blockchain? Because when you get to that, you have a self-sufficient and self-evolving system. At the moment, we took out, back in the days, 11 billion ADA to ensure that we have enough run rate to get to that equilibrium. But the true, like, what really on top of our mind right now is, how do we get more gas fees, some people call it, right? So we can cover, basically, the incentives. And that obviously goes into some really interesting directions about, you know, layer two. You've seen on many other large blockchains, the layer two ecosystems are becoming much, much larger than the actual layer one, right? And there's been some hurdles around, should we force people to layer one or to layer two? You know, roll-ups, you know, we have BLS on Cardano, right? You know, should we force people to a roll-up situation that you can bulk more things? But Cardano itself has a lot of advantages in the architecture, who allows you to do things you're not able to do on Ethereum or sort of account-based blockchains. I think you're the right guy to ask this. 20 years from now, how does the blockchain look different? So I actually believe that, first and foremost, we will probably not have a lot of podcasts like here exploring this topic, because the blockchain will be a core critical infrastructure who lies beneath the systems. So do I still have a job 20 years from now? I think so, yeah. Okay, thank you. I think so. But your job will probably change slightly, right? You might even be interviewing agents here in a humanoid format, right? I actually would love to do that. I would love to do that. But yeah, no, I do think journalism has actually a very important role to play. And one of the things I always sort of try and say to journalists when I speak to journalists is, how do you protect yourself? Because a lot of this high quality content you are producing is very frequently being taken out of context and used for other purposes. Like a click bait or like other things. And what we have on Cardano is we have a very good way to basically ensure that everything you do gets hashed and stored on the blockchain. So if somebody ever want to figure out what you said or your view on something, if that was really the right context, you can protect that, right? So I think a lot of what you're going to do in the future will be protected by a blockchain, including the property right of you, including your biomarkers, including your voice, those kinds of things. And this will be sort of, it'll be a human right for you to protect yourself and the content. So I'm going to live on. I'm going to live on the blockchain. I think you should already do that nearly in the next couple of weeks. You should explore this already because there will be only two types of journalists. There will be the ones who is protecting the content and the high value content they create. And there will be the one who don't think about it. And they wake up one day without a job because their brand has been taken down by some campaign using an AI or an AI agent against them because the cost of doing that is close to zero and the impact is tremendously high. One more for you. I think you're going to have a lot of new followers after this airs because you seem like a very cool guy, very energetic guy doing really cool things. Has there been one secret to your success that got you into this seat? Just from like meeting you for the first time, like you seem to have done a lot of different, really interesting things and maybe raised your hands numerous times to try new things. Oh, so personally for me? Yeah. I try to work with people who's better than me. So I really try every time I can to hire people which I think is better than what I am, either in a subject matter expertise or as a human being. And by trying to do that, I constantly learn. I am very rarely the smartest person in the room, in the organization I work in. But I work with people who are incredibly smart and I'm very humbled today that a lot of the people who work with me in this Non-For-Profit Foundation, they don't have to work one more day in their life. They're working there because they believe we do have a chance to change financial systems and social systems for the better. That we have an option, an obligation to humanity to make things better, not just for the one or two people or the 10 people who runs a trillion dollar company in the future, right? But for the global population of the world. Now we can't force people to take economic opportunities. But by creating economic opportunities for everyone out there, we create situations which benefits everybody. Welcome to Yao Finance. It was great to finally meet you, Frederik. I wish you much success in everything you're working on. Let's stay in touch. Tell Charles I said hi. I will certainly do so. I appreciate it.