Distributed Ledger Governance

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Long Blog – Explaining Visa, Canton, and the Architecture of Super Validators

Executive Summary

  • Stablecoin Industrialization: DLT is transforming settlement and interbank networks. There is more than one approach, ranging from closed networks to open on-chain. We discuss differences between Ethereum, JPM Kinexys and Canton Network.
  • Governance as a Catalyst: Governance and operational oversight have surpassed technical specifications as the primary factors driving institutional participation in distributed ledgers.
  • Visa’s “Super Validator” Role: Visa expands their network governance role into Canton as a Super Validator, applying its established “network of networks” model and operational rigor to a privacy-preserving institutional infrastructure. Trust requires a commercial construct and Visa has it.
  • Canton’s Privacy Architecture: Unlike public chains, Canton uses a “proof-of-stakeholder” model where transaction data is encrypted and distributed only to parties with a “need-to-know”.
  • Super Validators Explained: Visa provides services to manage the “Global Synchronizer,” providing secure sequencing and atomic settlement across domains without ever decrypting sensitive transaction payloads.
  • Transition from Silos: The native deployment of JPM Coin onto the Canton Network signals a definitive shift from closed “digital silos” to an interoperable, institutional-grade ecosystem.
  • Solving the Interoperability Paradox: The Super Validator model addresses the “SWIFT challenge” by allowing banks to maintain private ledgers while enabling the universal connectivity required for global trade. Yes there will still be closed networks, but Canton is shaping up to be the best universal bank network.
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Explaining the Death of OpenAI’s Instant Checkout

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Short Blog

To my regular readers, you know the flow of data within a network is complex (see Data Games). The news that OpenAI is effectively shelving its “Instant Checkout” initiative in favor of a referral-based “conversational commerce” model shouldn’t come as a surprise. While the tech press might frame this as a strategic pivot, those of us in the eCommerce trenches know it for what it is: a collision with merchant’s role in risk, costs, CX, control and their own AI dreams.

OpenAI attempted to solve its monetization problem by trying to seize control of the top of the funnel, betting that the sheer volume of consumer demand would force merchants to bow to their interface. They were wrong. They fundamentally miscalculated the power dynamics of the transaction and the complexity of the global conversion funnel, a funnel that Google understands intimately because they serve both ends of it globally (ie merchant partners).

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MPP Phase 2 Live – Ask Tom Goes Agentic

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Long blog – First 2 Pages are economic implications, last 6 pages are tech deep dive

MPP is a big deal because value exchange enables specialization and market forces to operate (as discussed in last week’s MPP – Addressing the Internet’s “Original Sin”.MPP and X402 are BIG.. really big. A whole new market. This isn’t about cash replacement or taking share from xx this is about enabling a new Economy. Today’s blog is 4 paragraphs of the economic implications (for investors and CEOs), followed by 4 pages on tech detail covering what I built. Please note “Ask-Tom” is just a model of an x402 service…. of course it won’t generate much demand (service ID is at bottom).

First, let me try to explain why this is such a big deal from an economic perspective. The foundational driver for MPP’s success is the radical reduction of transaction costs through standardized commercial terms. As outlined in my 2016 blog Small Wins, the forces that once drove asset-heavy, integrated organizations are atrophying in favor of “refragmentation” and specialized networks. Historically, the economic cost of inking a bilateral contract for every micro-interaction was prohibitive (ex “Account Creation” bottleneck that stifled agentic autonomy). Following the principles of Ronald Coase’s Transaction Cost Economics, MPP and x402 provide the multilateral governance and common commercial rules necessary to bypass these friction points. By establishing trust and speed through a common interface, these protocols allow for the “Small Win” of a single transaction to scale into a global network effect, where the cost of connection approaches zero.

This standardization enables the “Value Assembly” of “super-specialists” who can target previously unreachable “shale deposits” of niche market demand (see Network Effects and Value Assembly). A successful network enables specialists like “Ask-Tom” to provide high-value, grounded intelligence without the overhead of building independent settlement or reconciliation infrastructure. This is far beyond mere “agentic commerce”; it is an evolution in how software and hardware interact with EVERYTHING ECONOMICALLY. For example, MPP’s session-based economics provides a virtual “bar tab” for agents to execute tasks within human-granted budgets, paying only for precise resource consumption. This creates a sustainable commercial model where the incentives for specialization and market forces to operate on software service at a hyper granular level. Market forces in turn encourage specialists to solve increasingly granular problems across diverse domains, and unlocks the “shale deposits” of data that doesn’t play. I’ll discuss what this could look like next week as a follow up to Value Assembly.

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MPP Test – Demonstrating Significance: Phase 1 is Live

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For over 60 years we have been focused on human-centric communication in our networks. While we still have payment problems in this interaction, a whole world is evolving where machines interact with other machines. The scale of this interaction is limited by value exchange — after all, who wants to spend resources answering a bot’s question if they are just stealing your data and delivering no new customers (see this blog covering Cloudflare CEO Matthew Prince’s comments).

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MPP (and X402) – Solving the Internet’s “Original Sin”

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Yes another agentic payment acronym. This one is important enough to remember. Where AP2 and ACP address agents acting on behalf of humans, X402 and MPP are about agents paying agents. My friend Simon Taylor just put together one of his all-time best posts on MPP and The Intention Layer. Today’s blog is a follow-up with a bit more of a comparison, and why this is a big deal from a payment and economic perspective. My key takeaways from Simon’s post

  • The “Skinny Master Account”: Taylor suggests that humans will grant “intent” (a budget and a goal) to an agent. MPP’s Session model perfectly mirrors this: a human “locks” $50 into a session (the intention), and the agent autonomously spends it in sub-cent increments (the execution).

  • The Substrate of AI: Taylor points out that AI thrives on Structured Text (Markdown). Ironically, legacy finance (ISO 8583, NACHA files) is essentially structured text. MPP acts as the “translator” between the agent’s markdown-based intentions and the rigid requirements of the global banking system.

  • The Outcome: The winner won’t be the protocol that is “most decentralized,” but the one that most effectively manages Trust and Permissioning. Stripe and Visa, as the incumbent trust-layers of the internet, are better positioned to solve the “Agentic Spend” problem than a pure-crypto protocol.

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Stablecoins Are Not Free — Why They Are A RAIL in Consumer Payments

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There’s a narrative running through payments circles right now that goes something like this: stablecoins will replace card rails because they’re cheaper, faster, and programmable. Stripe makes acceptance easy. Card networks are too slow to innovate. Machine-Machine payments need programmability. GENIUS Act passed. The future is obvious.

I’ve been writing about stablecoins for over two years, from the case for stablecoin as a trust platform to the ECB’s monetary sovereignty alarm. And I keep coming back to the same conclusion: stablecoins are not a replacement for cards, but rather another rail with cards retaining their role as the layer of abstraction for multiple networks (as they do today). They will do well where cards don’t play (micropayments, B2B and uncarded markets).

Here’s why (and why that matters more than you might think).

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Amazon vs Walmart: Two Very Different Bets on Agentic Commerce

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Amazon and Walmart are the two dominant forces in US retail. They are also taking fundamentally different approaches to agentic commerce — and those differences will shape how payments, checkout, and consumer trust get redesigned over the next three years. This divergence has direct implications for card networks, payment processors, authentication infrastructure, and anyone building for the future of checkout.

Amazon: Closed Stack, Agentic Inside-Out

Amazon is building agentic commerce from the inside out — embedding AI agents deep into its own proprietary infrastructure and deliberately keeping external agents at arm’s length. The strategy is control through ownership.

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Agentic Recap – Last Week’s Big Announcements. 

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Sorry for delay.. Just had a new grandson on Wednesday, and everyone is doing fine. One quick note, if your looking for one of my old posts, or topics like AP2, try my new search. Completely rebuilt to look through my posts and all “trusted” authorities on a topic.

Exec Summary

Last week’s flurry of announcements confirmed our thesis: Agentic commerce is off to a slow start, and the “machine-to-machine” (M2M) revolution is currently a “human-in-the-loop” (HIL) reality. Despite the hype, machines aren’t autonomously settling transactions yet; they are discovery engines landing consumers on retailer checkout pages. While “lab” pilots show machine to machine transactions are technically possible – in a lab. The reality is conversational commerce, more like an enhanced search. 

Key Items covered today

  1. Agentic Hurdles are huge. Changing consumer behavior, shifting risk, economic “Gordian Knot” of value creation and pricing, Trust and Authorization, …etc. The payment piece is the “easy” party.  There will be no wholesale change in the next 2-3 years, merchants and marketplaces want to retain consumer behavior and leverage their own data, the future for most transactions will be a checkout on the merchant’s website. 

  2. Card networks are firmly established as the payment method and will retain their role as the identity infrastructure of the internet. Stablecoin is a settlement  innovation, and cards can sit on top. Visa is at least 2 yrs ahead of MA. MA’s agent pay integration to Google’s AP2 mandates is still a lab experiment that will require both Issuer and merchant approval. For example Banks will want the full intent mandate to take the risk, something neither Google nor Merchants will be keen to share. 

  3. OpenAI’s abandonment of their own wallet is very significant and a realization that merchants hold the keys in the early days of eCom, with many major merchants wanting a PAR to reference COF, not a tokenized credential where they own the risk. 

  4. Visa’s two big announcements are significant. The partnership with Bridge to issue stablecoin linked cards in 100 markets will propel a new market for cards in M2M based UCs.  “INTELLIGENT AUTHORIZATION” a universal acceptance API against different schemes and payment types, thus eliminating the need for costly infrastructure rebuilds. 

  5. When perfect authentication does happen, it will be a watershed moment for payments and every entity that provides risk services. Processors will be particularly hard hit, afterall how will processors differentiate when every payment type has 0 fraud and 100% authorization rate. Shopify and other merchant service providers (MSPs will gain significant leverage and expand their own VAS). This dynamic explains why Stripe is investing so heavily in Stablecoin, its an effort to differentiate and improve speed and a developer community in something unique.

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Stablecoins and Monetary Policy: The ECB Confirms What Italy Said Last Year

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The ECB published a study today warning that stablecoins could erode retail deposits across the eurozone and undermine the effectiveness of monetary policy. The finding is notable — not because it’s new, but because it’s taken this long for the institution to officially say it.

As I related last May, Italy’s Finance Minister Giancarlo Giorgetti made exactly this argument, warning that the displacement of traditional bank deposits by dollar-denominated stablecoins represented a direct threat to European monetary sovereignty. His remarks were largely dismissed at the time as political protectionism. The ECB’s study vindicates the concern. The mechanism is straightforward: if depositors move funds from bank accounts into stablecoins, banks lose the deposit base that anchors their lending capacity — and the ECB loses its primary transmission channel for monetary policy. Rate changes simply don’t land the same way when the money isn’t sitting in a regulated deposit account.

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Stablecoin Rewards’ Last Hope – Clarity Act

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Summary

  • Clarity Act stuck in Senate on Stablecoin Rewards, 70% chance of passage this year
  • Stablecoin yield (or anything that resembles it) goes away, and rewards look more like what you have on your Visa card. Coinbase pulled out because of crypto restrictions in the bill (not stablecoin).
  • Industry will likely pivot to sweep, and Stableocin becomes just another rail, which will require consumer and merchant adoption, without the big “draw” of balance rewards. Thus, balances stay in transactional and interest-bearing accounts, and friction increases w/ stablecoin payments.
  • Politics of key players and quotes in blog today.

The Digital Asset Market Clarity Act of 2025 (H.R. 3633) is the last hope for Stablecoin issuers to save rewards. While the bill passed the House with a strong bipartisan vote on July 17, 2025, its progress has stalled in the Senate (as of Feb 2028) with intense disagreements regarding the regulation of stablecoin “rewards” and yield-like incentives.

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