A portfolio built around one investor’s needs, monitored by an AI agent and traded on a blockchain could reshape wealth management. It would also raise a familiar question in an unfamiliar setting: who carries responsibility when something goes wrong?
Chuck Mounts sees that question as central to the market’s evolution. The former Chief DeFi Officer at S&P Global, speaking in a personal capacity with BFRR’s Stefan Grasmann, brings the perspective of a former New York Fed bank examiner and Wall Street research executive to a debate often dominated by technology.
On-chain finance redistributes trust
Financial systems rely on confidence because leverage and incomplete information make them vulnerable to sudden changes in belief. Uncertainty about one institution can spread to others. Supervisors have spent decades building safeguards around those relationships.
Blockchain offers ways to change that arrangement. More visible exposures could help institutions assess what they face. Atomic settlement, in which the linked transfers of a trade happen together, can reduce counterparty exposure during settlement. Mounts sees scope for fewer intermediaries and lower costs.
Mounts expects public blockchains to underpin on-chain finance, with privacy protections that institutions can accept. Some information stays off-chain. Leverage can persist or increase. The technology changes where confidence is placed and how risks are observed; the underlying sources of financial fragility remain relevant.
An AI portfolio needs an accountable decision-maker
Mounts is especially interested in combining blockchain execution with agentic AI. An investor could specify exposures, views and tolerance for losses, with an agent helping construct and manage the portfolio. Bespoke strategies could become available at a scale that conventional wealth management struggles to deliver.
The commercial promise of on-chain finance would then extend into the relationship between investment firms and their clients. Standard model portfolios could face competition from services tailored much more closely to individual circumstances. The investment needed to build those capabilities could, Mounts believes, accelerate consolidation in asset management.
His own experiments expose the distance to a dependable service. Agents can return assumptions that an experienced practitioner finds unconvincing. He describes correcting their interpretations of inflation and labour-market data. Better tools will still need a clear framework for fiduciary responsibility: who owes the client a duty, and who can be held accountable?
Stablecoins connect the new markets to the old
As stablecoins become more widely used, their significance will depend on how deeply they enter economic activity. Mounts argues that market capitalisation alone offers an incomplete measure of their systemic importance. Their role in payments, collateral and investment markets will shape the consequences of a loss of confidence.
Large holdings of US Treasuries by stablecoin issuers could also create increasingly important connections to conventional markets. Mounts leaves open what further growth might mean for policy and the Treasury market. The structure of adoption will matter.
Grasmann points to another channel: a holder worried about one token may swap into another stablecoin or a cryptoasset. Stress can therefore move through trading venues and lending markets before it appears as a straightforward redemption into bank money. Analysing an issuer in isolation risks missing those connections.
AI adds uncertainty to that picture. Agents using more information might respond differently from people during a panic. They might improve decisions or introduce different patterns of market stress. Mounts treats this as an unresolved question about how an increasingly automated financial system could behave.
Europe’s test is whether innovation stays
Europe’s place in on-chain finance will depend partly on how its policy framework balances consumer protection, systemic risk and the ability to build new businesses. Mounts worries that restrictive conditions could shift entrepreneurial activity elsewhere as other jurisdictions advance. He favours a principles-based approach that can accommodate changing market capabilities.
Inside financial institutions, the immediate task is to build understanding. His response at S&P included training and a research programme intended to develop expertise across the organisation, including its leadership. Without familiarity with the tools, executives struggle to judge how market structure might change around their business.
Mounts’s own education included getting a hardware wallet and using DeFi protocols to swap and trade. Executives responsible for investment decisions could begin by following the path of a single transaction and understanding what they are asking their institution to trust.