Artificial intelligence might be quietly strengthening the US dollar’s dominance, not threatening it. This is the argument put forward by economists Chenxu Fu and Xianguo Huang from the ASEAN+3 Macroeconomic Research Office (AMRO) in a recent analysis. Their focus: the growing role of dollar-backed stablecoins linked to AI-driven financial transactions.

The Compute-Dollar Cycle Explained

At the core of their thesis lies what they call the “compute-dollar loop.” It starts with energy powering data centers. These centers transform electricity into computing power, which companies rely on constantly. Since these computing resources become a recurring expense, transactions are mostly billed in US dollars. Crucially, AI agents facilitating these payments could prefer using dollar-pegged stablecoins, creating a steady demand for the currency.

This cycle mirrors how oil consumption historically anchored the dollar's global role. As computing becomes indispensable, the dollar could solidify its position by being the currency of choice for AI’s operational costs. The reserves backing these stablecoins, in turn, would flow into US Treasury bonds, reinforcing the financial ecosystem.

The economists point to real-world examples supporting their idea. Anthropic, a US-based AI firm, recently signed a 20-year lease with TeraWulf for data center space. This contract, paid in dollars, shows a long-term commitment to dollar-denominated computing infrastructure. As AI infrastructure expands, these dollar-linked contracts might multiply, further embedding the currency in the AI economy.

While this scenario remains speculative, its implications could be far-reaching. It suggests that even as talks about dedollarization continue, technological shifts like AI might actually deepen the dollar’s entrenchment through new financial mechanisms. This perspective also aligns with recent moves in the crypto space, where stablecoins continue to be a key link between digital assets and traditional finance.

This content is for informational purposes only and should not be considered financial advice.