Cloudflare and Coinbase launch x402 Foundation for AI-driven payments
Sep 24, 2025
Cloudflare and Coinbase launch the x402 Foundation to let AI agents make automated payments using stablecoins.
In a groundbreaking collaboration, Cloudflare and Coinbase have unveiled the x402 Foundation, an initiative designed to set a universal standard for AI-driven payments. This cutting-edge protocol leverages the HTTP "402 Payment Required" error code, enabling AI systems to autonomously handle financial transactions online. By allowing machines to pay for web resources directly without human involvement, the x402 protocol represents a significant advancement in the evolution of automated online payments.
A Leap Forward for AI Transactions
Brian Armstrong, CEO of Coinbase, emphasized the transformative potential of the x402 protocol in enhancing the financial capabilities of AI. Armstrong noted the limitations of traditional payment systems, which are optimized for human interactions rather than the fast-growing number of machine-driven transactions.
"We’re launching the x402 Foundation with @Cloudflare", Armstrong shared in a statement. "I’ve been thinking about how internet payments should work for years. Or more specifically, how they aren't working, and need to improve. x402 is a big step forward. AI agents can now transact value, not just exchange info."
The new protocol allows AI agents to process payments by sending payment authorization headers to servers. After verification, these agents gain immediate access to the paid resources, such as data, services, or content. This streamlined approach paves the way for innovative business models, including systems where autonomous bots pay for real-time resources on demand rather than relying on traditional subscription-based models.
Stablecoins as the Backbone of AI Payments
At the heart of the x402 protocol are stablecoins, which play a pivotal role in enabling machine-driven transactions. As programmable digital currencies that settle within seconds, stablecoins are ideally suited for AI applications. The growing use of stablecoins highlights this shift - by June 2024, bots accounted for 70% of stablecoin transfer volumes, underscoring the increasing prevalence of machine-led financial activity.
In addition to blockchain-based payments, the x402 protocol supports deferred payment methods, such as credit cards and bank accounts. A deferred payment scheme proposed by Cloudflare offers batch settlements at the end of each day, creating an efficient billing system for bots engaged in repetitive tasks, such as collecting data from websites.
Transforming Industries with x402
The x402 protocol’s potential applications extend across a wide range of industries. In cloud computing, major providers like Amazon Web Services are exploring its integration to facilitate seamless payments for cloud services. Similarly, Web3 storage platforms, including Pinata, have adopted x402 for pay-per-use file storage. AI platforms such as Heurist are also leveraging the protocol to enable efficient research payments. These examples demonstrate the far-reaching possibilities of the x402 Foundation in reshaping business models and operational processes.
Coinbase and Cloudflare Driving the Future of Machine Economies
The partnership between Cloudflare and Coinbase reflects a shared vision of driving innovation in machine-to-machine payments. By addressing the inefficiencies of existing payment systems and integrating blockchain technology, the x402 Foundation positions itself as a cornerstone for the emerging machine economy.
As adoption of the x402 protocol continues to grow, Coinbase remains at the forefront of expanding stablecoin infrastructure to support these advancements. This collaboration underscores the commitment of both companies to revolutionize how AI and automation interact with financial systems.