AI is forcing a rethink of how money moves — and legacy banks may be near a breaking point, Microsoft and Chainalysis told attendees at an Alchemy event in New York City. Bill Borden, Microsoft’s corporate VP for worldwide financial services, warned that as automated systems handle ever-larger volumes of transactions, traditional architectures will start to fail when “latency, scale, [and] complexity are starting to impact your ability to compete.” Automation in finance isn’t new, he said, but the debate has shifted from “can we automate?” to “can we trust and control what automation does?” For regulated firms that question is existential: they must be able to show “what controlled it” and whether an automated system “followed the policy” when decisions occur without direct human intervention. Microsoft is building tools intended to bridge that gap — systems that assign identities and permissions to AI agents and log their actions so firms can demonstrate auditing, policy compliance and governance. The company is pushing this capability across its product stack, including its AI assistant integrations. Chainalysis CEO Jonathan Levin argued that crypto already offers a working blueprint for high-volume, automated finance. Blockchains, smart contracts and software wallets routinely settle large numbers of transactions without human sign-off — essentially an agent-based model in production. “We’ve been preparing for these moments way before other parts of the financial services industry,” Levin said, noting that the crypto ecosystem’s experience tracking illicit funds across “thousands of different wallets” mirrors the kind of monitoring financial institutions will need as AI-driven transactions scale. Both executives expect a hybrid future. Levin predicted that “the majority of commerce in 10 years’ time will be settled on public infrastructure,” while Borden envisioned a more integrated landscape where public blockchains, private networks and traditional payment rails coexist, connected by software layers that enable interoperability and oversight. In short: legacy rails aren’t going away overnight, but software and AI will increasingly sit between them and public crypto infrastructure — and firms that can demonstrate control and auditability will have the competitive edge. Read more AI-generated news on: undefined/news