Is Tokenization the Currency of AI?

By Susan Lindeque, CEO, Avestix  

Artificial intelligence (AI) is transforming every aspect of financial services, including venture capital and investing. 

Could an AI-powered currency be next? 

We’re already seeing signs that AI tokenization is coming into its own as a powerful new payment alternative.  

AI tokenization, which converts ownership rights into assets recorded on a blockchain ledger, should not be confused with cryptocurrencies. Cryptocurrencies are decentralized digital currencies; AI tokens offer value in specific use cases and enable transactions within AI ecosystems.  

Monetizing Data and Computing Power 

To see the full value of AI tokenization, it’s essential to remember that AI is driven by data, but, right now, most datasets are controlled by large entities. 

AI tokenization addresses this reality by helping to democratize data by enabling data providers to tokenize fractional ownership. AI tokens can be sold or traded, via smart contracts, to the data’s owners. This enables people and entities to remain in control and monetize their data by giving preferred AI developers access to a portion of it. 

The Golem Network, a decentralized, open-source platform, uses a similar model, but applies it to computing power. Golem users can “rent” unused computing power in exchange for tokens. As the company explains, “this symbiotic relationship ensures a balanced, self-sustaining network, paving the way for limitless innovation and growth in the decentralized world.”

AI Marketplaces 

Similarly, AI tokenization can power decentralized AI marketplaces, where AI models and services are made available in exchange for tokens. Developers can accept AI tokens in exchange for their AI platforms, allowing others to access and customize the AI models to meet their own needs. Rather than bartering with traditional currencies, developers receive tokens, and users can then integrate the AI models as needed. The foundational structures, though, remain the property of the developers who designed them. 

Not only does this create value for the AI developers, it also incentivizes them to continue innovating and expanding their existing platforms. 

The Future is Here

But, this isn’t entirely news. People have been discussing the value of AI tokenization for years. 

In 2023, Cointelegraph did a deep dive into decentralized autonomous organizations (DAOs) and tokenized AI models, quoting Vance Spencer, co-founder of crypto-native investment company Framework Ventures, who predicted that “probably some of the most valuable assets on-chain will be tokenized AI models.” 

In 2024, another outlet predicted that the “rise of AI tokens as a universal currency is not just a speculative fantasy; it is a tangible shift that could significantly impact global economic transactions.” 

Only a few weeks ago, a report from the New York Federal Reserve and the Bank for International Settlements determined that "central banks could use smart contracts to easily and quickly create new facilities or adjust existing ones to optimize the implementation of monetary policy in a tokenized environment." The report’s authors concluded that future operations might be "nimbler in uncertain conditions and potentially reduce friction between the time of announcements and offerings."

Meanwhile, the Financial Conduct Authority (FCA), the key financial regulator in the U.K., recently announced a five-year strategy designed to support fund tokenization — one that will include a “tech-positive approach” based on the agency’s previous work testing various AI and machine learning tools.

If the FCA and the Federal Reserve are acknowledging the value and efficiency that tokenization can bring mainstream financial services, then the prospect of tokens, AI-powered and otherwise, cannot be far off.   

Want to Invest in a Better Tomorrow? 

AI, blockchain, quantum computing and other advanced technologies are transforming financial services and every other industry. 

Do those technologies have a place in your investment strategy? 

Avestix offers a series of funds that help accredited investors to participate in the transformation. If you are ready to invest in the future, contact Avestix. 

All investments involve risk and some investments and investment sectors discussed may not be suitable for all investors. Please consult your financial advisor before making any investment decisions.