Cloudflare, a leading internet infrastructure company, has announced its intention to launch a U.S. dollar-backed stablecoin named "NET Dollar." The move is designed to create a new payment system for the anticipated growth of autonomous artificial intelligence agents in e-commerce, which are expected to handle online shopping and other tasks on behalf of users.
This initiative aims to facilitate a future where microtransactions and pay-per-use models become standard, requiring a financial infrastructure capable of processing small, high-volume payments between machines.
Key Takeaways
- Cloudflare is introducing a U.S. dollar-backed stablecoin called "NET Dollar."
- The primary goal is to support automated payments for artificial intelligence agents in online commerce.
- The company is collaborating with Coinbase on the x402 Foundation to standardize machine-to-machine payments.
- This development aligns with broader industry trends, including Google's new Agent Payments Protocol.
A New Financial Framework for AI Agents
The technology industry is increasingly focused on developing autonomous, goal-driven AI "agents." These software programs are designed to complete complex tasks independently, with online shopping being a major application.
As these agents become more common, they will need a way to transact securely and efficiently without human intervention. Traditional payment systems are often too slow or costly for the high frequency of small payments, known as microtransactions, that AI-driven commerce is expected to generate.
Cloudflare's CEO and co-founder, Matthew Prince, highlighted this need for updated financial infrastructure.
"The internet's next business model will be powered by pay-per-use, fractional payments, and microtransactions — tools that shift incentives toward original, creative content that actually adds value," Prince stated in a news release.
He added that Cloudflare plans to use its global network to help modernize the systems required to move money at the speed of the internet, aiming to foster a more open and valuable online ecosystem.
What Are Stablecoins?
Stablecoins are a type of cryptocurrency designed to maintain a stable value. Unlike volatile assets like Bitcoin, they are typically pegged to a reserve asset, most commonly a fiat currency like the U.S. dollar. This stability makes them suitable for transactions and as a store of value. Major players in the stablecoin market include Tether and Circle Internet Group, with companies like PayPal also entering the space.
Strategic Collaborations in the AI Economy
Cloudflare's stablecoin plan is part of a wider industry push to build the economic backbone for AI. The company is not working in isolation, engaging in key partnerships to standardize the technology for machine-to-machine payments.
Partnership with Coinbase on the x402 Foundation
A significant part of this strategy is the collaboration with cryptocurrency firm Coinbase to establish the x402 Foundation. This initiative is based on the x402 protocol, which is designed to enable direct financial transactions between machines.
The protocol addresses a key challenge where automated payments fail because websites lack standardized response codes for machine-initiated transactions. According to Jackson Ader, an analyst at KeyBanc Capital, this often prevents seamless payments that would otherwise require human input.
The x402 transaction flow, developed by Coinbase, is intended to allow AI agents to pay for browser sessions or for digital assistants to purchase goods directly, streamlining automated commerce.
"Often times, payments from machines aren't able to be made as website operators lack standardization of response code formatting and ability of response, preventing seamless payment as humans are often able," Ader noted in a report.
Alignment with Other Tech Giants
Cloudflare's efforts are in step with other major technology companies. Google's parent company, Alphabet, recently announced its Agent Payments Protocol (AP2). Developed with 60 industry partners including Mastercard, American Express, and PayPal, AP2 aims to create a secure commerce framework for AI agents using cryptographically signed digital contracts.
Cloudflare also has existing relationships with leading AI firms. It provides secure connections for consumers signing up to use OpenAI's ChatGPT and supports Anthropic's Model Context Protocol (MCP), a standardized method for connecting AI agents to external data and applications.
Market Context and Company Performance
The announcement comes at a time of growing interest in stablecoins, partly driven by new regulations. The Genius Act, signed into law in July, is anticipated to increase the adoption of stablecoin currencies in the United States.
Cloudflare, founded in 2009, operates a global network that provides security and performance services for web applications. The company's stock has performed strongly, reflecting investor confidence in its strategic direction.
Cloudflare Stock Snapshot
- Stock Symbol: NET
- Recent Price: Closed at $218.20, up 0.3% on the day of the announcement.
- 2025 Performance: The stock has risen 93% year-to-date.
- IBD Composite Rating: 96 out of 99.
- Accumulation/Distribution Rating: B-plus, indicating moderate institutional buying.
In another recent development, Cloudflare has also taken steps to address the impact of AI on content creators. The company recently introduced an option for website owners to block AI crawlers from scraping their content, giving them more control over their intellectual property.
The combination of developing new payment rails for AI while also providing tools to manage AI's access to data positions Cloudflare at a critical intersection of the emerging AI-powered economy.
