Software Eats the Brokerage
AI is collapsing the cost of running finance while degrading the documents it trusts. Cryptographic rails solve both—and finally make four billion investors worth serving.
The internet made it free to watch. Finance kept it expensive to own. Billions of people follow markets from a phone, yet four billion adults cannot buy into them. Not because the system is hostile—because it is expensive. Modern finance can move $500 million domestically in seconds. It cannot serve a $50 investor at a profit. Compliance, custody, settlement: the entire machinery was built for institutional scale, and its costs do not scale down.
The exclusion mechanism is not mysterious. To let someone buy $50 of stock, a traditional intermediary must still perform the full institutional dance: verify identity, screen sanctions, collect documents, arrange custody, connect to settlement, maintain records, assume regulatory liability. When the lifetime revenue on the account is measured in cents and the compliance burden in dollars, the math does not become inclusive just because people make grand speeches about an idealistic “Finternet”. Financial institutions do not hate small investors. Their unit economics do.
So the system does the rational thing. It sets minimums. It geoblocks. It “de-risks.” It politely informs vast populations that they may participate later—once they have more wealth, cleaner paperwork, or the good fortune to live in a friendlier jurisdiction. In roughly half the world’s countries, there is not even a liquid stock exchange. The financial system works well. It just does not work for most people.
For decades, that was an inconvenience. In an economy approaching AGI, it becomes a structural crisis.
The Stakes are Rising
Since 1987, U.S. labor income has risen 58 percent, while capital income has surged 137 percent. That divergence is not over—AI will deepen it. As my co-authors and I argue in “Some Simple Economics of AGI,” AI automates tasks fastest where outputs are measurable and verifiable. That compresses returns to routine labor while amplifying returns to ownership. If your only asset is your labor, you are structurally short the future. Access to capital markets is no longer one path to prosperity among several. It is the path. And roughly four billion adults worldwide cannot take it.
AI Breaks the Cost. Then It Breaks the Evidence.
AI changes part of this equation fast. Much of retail finance is rules-based and measurable: onboarding, document handling, customer support, suitability checks, reporting, reconciliation, basic portfolio construction. Those are exactly the tasks AI drives toward software-like marginal cost. The minimum economically viable account size should fall hard. A $50 account in Nairobi or Manila ought to become almost as cheap to serve as a $50,000 account in New York.
But here the story takes a harder turn. AI also degrades the evidence that compliance depends on.
Finance is not only an execution business. It is a verification business. The same tools that make forms cheaper to process make documents cheaper to fake. A scanned passport is no longer just identification—it is raw material for a generative model. A video selfie is no longer a liveness check—it is a challenge to the best deepfake generator on the market. AI makes the onboarding cheaper and the utility bill less believable.
We call this the measurability gap: AI lowers the cost of executing tasks far faster than it lowers the cost of verifying whether those tasks were done honestly. In finance the gap bites immediately. You can automate the paperwork faster than you can believe the paperwork. A system that responds by layering ever-thicker checks on top of increasingly untrustworthy documents is not solving the problem. It is performing seriousness at rising cost.
Not the Casino. The Cryptography.
The resolution is architectural, and it comes from the part of crypto that never makes headlines.
The useful insight is not that every asset should become a meme coin. It is that compliance and ownership can be made portable, programmable, and provable. In a better design, a trusted institution verifies a user once and issues a reusable digital credential. The user can then prove what regulators actually care about—residency, sanctions clearance, accredited status, eligibility—across compliant venues without handing over the same dossier every time. Zero-knowledge proofs are the technical mechanism. The plain-English version: stop making people reapply for the right to exist every time they want to buy an asset.
But architecture is policy. If tokenization is sold to incumbents as private back-office software, they will do the obvious incumbent thing: lower their own costs, preserve the walls, keep the spread. The economics become transformative only when the base layer is open. Then portability is real. Users move assets between providers. Services unbundle. Intermediaries compete on price instead of living off network lock-in.
That matters because traditional finance still extracts rent through closed networks. A simple equity trade can bounce through brokers, custodians, clearinghouses, transfer agents, and foreign-exchange layers—each adding cost, delay, and another chance to say no. On open rails, settlement moves from days to near-instant atomic exchange. Compliance is done once and reused. Minimums shrink from meaningful sums to the size of a mobile top-up. Recent estimates suggest tokenized equity trading could cut transaction costs by more than 30 percent. More important, it changes who counts as a customer.
Finance starts to look less like a cartel of databases and more like the internet.
The Leapfrog
The adoption pattern already tells you where this goes. Digital-asset usage is strongest where traditional access is weakest: emerging markets, mobile-first economies, places where people solve financial problems with software because the formal system never solved them. That is the same logic that produced mobile money in Sub-Saharan Africa. But the stakes are higher. What is being leapfrogged is not payments. It is the brokerage account—and with it, access to the compounding that increasingly separates those who build wealth from those who watch it built.
None of this requires regulatory nihilism. The sensible design keeps the base layer neutral and enforces local rules where they belong—at exchanges, custodians, and application-layer touchpoints that onboard users and assume obligations. Countries can still apply capital controls, disclosure requirements, and investor protections. The point is not to abolish regulation. It is to stop hard-coding yesterday’s inefficiencies into tomorrow’s infrastructure.
The real test of the next financial system is not whether Wall Street can tokenize another product for institutions. It is whether a person with $50 in weekly savings can buy, hold, and sell a tiny slice of productive capital as easily as sending a message.
Finance’s last frontier is not payments. It is participation.
A version of this post originally appeared at Forbes.com.
The missing piece in your architecture is verification. Funds won't hand execution to an agent they can't audit cryptographically. That's the layer that has to exist before any of this scales; and it doesn't yet. Or does it?