Rezolve AI and Tether Advance Direct Crypto Payments, Aiming to Disrupt Fiat-Conversion Card Market

Executive Summary

Rezolve AI, a leader in AI-powered commerce solutions, has partnered with Tether, the digital asset industry's largest stablecoin issuer, to launch a direct cryptocurrency payment system. This initiative, which integrates Tether's Wallet Development Kit (WDK) into Rezolve AI's Brain Checkout platform, seeks to enable seamless, fee-free crypto transactions for consumers and merchants, directly challenging the prevalent model of crypto credit and debit cards that typically rely on fiat conversion at the point of sale.

The Event in Detail

Rezolve AI's Brain Checkout platform is designed to facilitate direct purchases using cryptocurrencies such as USDT, bypassing the automatic conversion to fiat currency that characterizes most existing crypto card solutions. Daniel Wagner, CEO of Rezolve AI, has criticized these traditional crypto cards for utilizing "offchain credit card rails" and converting crypto to fiat. The partnership with Tether aims to offer a more authentic pathway to mainstream crypto utility. For merchants, Rezolve AI provides a fee-free conversion of cryptocurrency into fiat, addressing a key barrier to broader crypto payment acceptance. The integration of Tether's WDK, an open-source crypto wallet library, allows consumers to utilize their digital assets directly for everyday purchases. The company reports penetrating 44 million consumer devices and has secured clients including Dunkin Donuts and Ace Hardware.

Further solidifying its market strategy, Rezolve AI announced its alignment with Tether's USAT stablecoin, a U.S.-based stablecoin designed to comply with the GENIUS Act. This regulatory clarity is anticipated to accelerate Rezolve AI's expansion into the American market, particularly targeting the $30 trillion retail payments sector.

Market Implications

This development introduces a significant strategic shift within the crypto payments landscape, moving towards a model that minimizes or eliminates fiat conversion for the consumer. Existing crypto credit and debit cards, such as those offered by Coinbase, MetaMask, and Wirex, facilitate crypto spending by instantly converting digital assets into fiat at the point of sale. While convenient, this model often involves underlying fees or conversion spreads. Rezolve AI and Tether's approach, by offering fee-free fiat conversion for merchants, could potentially reduce transaction costs and increase profitability for retailers, thereby incentivizing wider adoption of direct crypto payments. This could catalyze a broader shift in merchant infrastructure, moving away from fiat-bridged solutions towards native crypto payment processing.

Merchant interest in accepting digital currencies is high, with approximately 83% expecting increased interest within 12 months. However, only about 4% of merchants currently accept crypto, highlighting a substantial adoption gap. Key drivers for merchant adoption include lower transaction costs, cited by 77% of merchants, and the ability to reach new customer segments. The current crypto payment apps market, valued at $556.9 million in 2024, is projected to grow at a 17-18% CAGR through 2033, indicating a robust potential for solutions that address merchant concerns regarding volatility and settlement risk.

Business Strategy and Market Positioning

Rezolve AI's strategy is predicated on disrupting the existing payment rails by leveraging direct crypto settlement and proprietary AI. The company owns its foundational AI and vision technology, holding patents that aim to reduce AI hallucinations, and commercializes capabilities such as Visual Search and Conversational Commerce. This intellectual property positions Rezolve AI to connect AI-driven shopping with a regulated crypto wallet ecosystem. The firm projects exceeding $100 million in Annual Recurring Revenue (ARR) by the end of 2025, currently trading at approximately 17 times ARR, which is below peer multiples ranging from 36 to 100 times. The integration of USAT and the associated regulatory clarity are expected to bolster institutional support and customer engagement, potentially improving its market valuation.

In contrast to other crypto payment solutions, Rezolve AI emphasizes a direct-to-crypto approach, differing from those that serve primarily as a bridge to fiat. This positions Rezolve AI and Tether to capitalize on the growing demand for frictionless, cost-effective digital transactions, especially in regions with high stablecoin adoption. Tether's USD₮ currently boasts 400 million users and generates approximately 35 million new wallets quarterly, providing a substantial existing user base for Rezolve AI's platform.

Broader Context

The push for direct crypto payments by Rezolve AI and Tether aligns with the broader Web3 ecosystem's goal of increasing cryptocurrency utility beyond speculation. The regulatory clarity provided by the GENIUS Act for stablecoins like USAT is crucial for fostering institutional trust and accelerating mainstream adoption in regulated markets. This development suggests a potential long-term shift in how cryptocurrencies are integrated into daily commerce, moving from fiat-conversion proxies to direct digital asset exchanges. The success of this model could significantly influence investor sentiment towards companies facilitating direct crypto payments and encourage more corporate entities to explore similar integrations, particularly those seeking to reduce transaction costs and access crypto-native customer bases. The ongoing growth in crypto commerce volume, driven by improved merchant onboarding tools, further underscores the opportune timing for solutions that streamline crypto-to-fiat conversion for merchants while offering direct crypto spending for consumers. Bitcoin and USDT currently account for the largest shares of merchant crypto transactions, at approximately 42% and 30-35%, respectively, indicating the specific market segments where direct stablecoin and cryptocurrency payments could see rapid growth.