Detailed Explanation of Coinbase x402 Payment Protocol

Authors: Erik Reppel, Nemil Dalal, Dan Kim, Coinbase; Translated by: AIMan@Golden Finance

Key Points: Coinbase is about to launch x402, a payment protocol that supports instant stablecoin payments directly via HTTP. It allows APIs, applications, and AI agents to transact seamlessly, unlocking a faster and more automated internet economy.

The internet economy has been struggling in terms of payments.

Traditional payment methods—credit cards, bank transfers, subscriptions—were built for a world before the internet age. They are slow, expensive, geographically restricted, and filled with manual steps. As digital interactions have scaled up, payment methods have lagged behind: fragmented, sluggish, and difficult to program.

We need a more modern approach — one that can support autonomous AI agents, the rise of stablecoins, and universally enable internet-native instant, frictionless payments. Recently, Citibank referred to this era as the "ChatGPT moment" in the payments space, while a16z called it the "WhatsApp moment" in the stablecoin sector, reflecting a growing consensus: the world is ready to embrace seamlessly interconnected, global payment channels like the internet.

At Coinbase, we address this challenge by introducing x402: an open standard that uses the original HTTP "402 Payment Required" status code to directly embed stablecoin payments into web interactions. The protocol is inspired by Balaji and his team's development of modern L2 technologies like Base years ago, where on-chain fees have been reduced to 1 cent, making many of the applications they prototyped possible.

x402 allows developers and AI agents to directly use stablecoin payment APIs, services, and software fees via HTTP. With just a few lines of code, x402 provides built-in authentication, automatic settlement, and seamless integration with existing web infrastructure. It makes monetization instant and automated, enabling businesses and agents to transact value as easily as exchanging data.

Erik Reppel, the Engineering Director of Coinbase Developer Platform and co-author of the x402 white paper, summarized the vision behind this initiative:

We created x402 because the internet has always needed a native payment method - and stablecoins have ultimately achieved this. Just as HTTPS ensures online security, x402 can define the next era of the internet; an era where value flows as freely and instantaneously as information. We are laying the foundation for an economy that is not only run by humans but also by software - autonomous, intelligent, and always online.

x402, in collaboration with leading partners such as AWS, Anthropic, Circle, and NEAR, shares the same belief in an open and programmable internet economy.

Gagan Mac, Vice President of Product Management at Circle, the issuer of USDC, believes that x402 is a powerful new standard that can make stablecoin payments first-class citizens on the web:

USDC is designed for fast, borderless, and programmable payments, while the x402 protocol elegantly simplifies the real-time monetization process by eliminating steps such as registration, verification, and complex signatures. Together, they will unlock exciting new use cases, such as micropayments for AI agents and applications.

Illia Polosukhin, co-founder of NEAR and co-author of "Attention Is All You Need" (the paper introducing the architecture behind GPT), believes that x402 is very suitable for building a seamless agent-driven experience:

"Our vision is to combine the frictionless payments of x402 with NEAR intentions, allowing users to confidently purchase anything through their AI agents, while agent developers earn revenue through cross-chain settlements, making the complexity of blockchain invisible."

Together with these partners, we have not only launched new payment standards but also built infrastructure for the digital economy. This infrastructure is fast, programmable, and genuinely internet-native, providing a design experience equivalent for both humans and autonomous machines.

Why is x402 so important

Traditional payment methods are not only outdated but also severely hinder the development of the internet economy.

Traditional payment systems such as credit cards and bank transfers were not built for today's fast, globalized, and automated internet. They are slow, costly, and filled with geographical and identity verification barriers. Even crypto solutions often require complex wallets or blockchain-specific tools, which not only fail to eliminate friction but actually increase it.

x402 resolves this issue by restoring the HTTP 402 "Payment Required" status code, which is an idle feature on the Web designed to enable seamless payment requests in standard HTTP interactions. Now, clients (whether human, script, or AI agent) can immediately respond to payment prompts using widely-used stablecoins (e.g., USDC), making transactions as easy as loading a webpage.

Specifically, x402 supports:

• The server immediately issues a standardized 402 "Payment Required" response for a high-quality digital resource.
• Directly embed automatic payment instructions in the standard HTTP response.
• Seamlessly integrated into existing HTTP infrastructure without the need for special wallet interfaces, layers, or separate authentication mechanisms.

The actual impact is obvious: payments have become instant, seamless, and directly embedded into the Internet—opening up new business models, frictionless global transactions, and fully autonomous software interactions.

How x402 Works

x402 Follow a simple process:

1. The client (AI proxy or application) requests access to an x402-enabled HTTP server (e.g. GET/api) with the required resources.
2. The server responds with a 402 payment required status, including payment details (e.g., price, acceptable tokens).
3. The client sends a signed payment payload using supported tokens (such as USDC) through standard HTTP headers.
4. The client retries the request, now including the X-PAYMENT header with the encoded payment payload.
5. Payment service providers (such as Coinbase x402 service providers) verify and settle payments on-chain and fulfill requests.
6. The server returns the requested data to the client, including the X-PAYMENT-RESPONSE header confirming the transaction success.

By extending the native HTTP behavior, x402 can work with almost any client (browser, SDK, AI agent, mobile application) without the need for additional requests, changes to the client/server flow of the website, or extensive UI integration.

What can developers build

With the help of services like Coinbase x402 Facilitator and other custody solutions, developers can easily integrate stablecoin payments directly into their services with just a few lines of code. This eliminates the complexity, overhead, and friction associated with traditional payment integrations, enabling creators and businesses to unlock new revenue streams and user experiences.

For example:

• Paid API: Monetize each API call instantly through frictionless micropayments, eliminating the barriers and complexities of subscription-based models.
• Software Unlock: Provides seamless, on-demand access to advanced features and content without subscriptions or complicated paywalls.
• Metering Service: Charges users dynamically based on actual resource usage, providing a scalable pay-as-you-go experience without the hassle of prepayment or billing cycles.

Imagine if creators could automatically earn rewards for every minute of views, news websites could instantly monetize individual articles, or AI agents could autonomously purchase cloud resources in real-time. By embedding payments directly into HTTP, x402 makes previously difficult microtransactions effortless—transforming the daily digital interactions among humans, automated scripts, and autonomous agents, seamlessly connecting today's web with the future decentralized digital economy.

What can AI agents unlock

Today's AI agents can think, reason, and act, but their trading capabilities still rely on manual, human-driven methods such as credit cards, prepaid API keys, or subscription models. x402 fundamentally changes this by empowering AI systems with the ability to trade autonomously in real-time, ushering in a new wave of intelligent, independent software agents.

Through x402, intelligent agents can achieve instant economic autonomy, enabling the following scenarios:

• Autonomous Cloud Computing: AI agents can provide computing resources in real-time and charge based on inference, thereby eliminating manual management credit or manual configuration processes.
• Market Intelligence: The AI system autonomously accesses specialized data sources, seamlessly paying per request to obtain critical market or product insights without human intervention.
• Prediction Market: Automated betting agents can independently acquire real-time sports statistics and market data, allowing for informed betting without human intervention.
• Consumer and Supply Chain Automation: AI inventory managers dynamically request and pay for real-time quotes, supply chain data, and logistics, autonomously adapting to market changes instantly.
• AI-Powered Creative Tools: Intelligent content creation systems autonomously access premium media libraries, design tools, and dedicated software to instantly pay for resources to independently produce high-quality content.

x402 does not require constant manual adjustments like static tools; instead, it transforms AI into a truly dynamic agent—capable of autonomously discovering, acquiring, and utilizing new features as needed. When the agent encounters paywalls or premium resources, it only needs to add a signed stablecoin payment to seamlessly restore interaction and continue moving towards its goal.

This is not just automation, but also the economic autonomy of software. It represents the foundation of a new generation of intelligent agents that can trade, adapt, and evolve independently.

Who is building with x402

Our early partners demonstrated the transformative possibilities that will arise when payments are seamlessly integrated into HTTP, unlocking new business models and enabling truly autonomous software interactions:

Autonomous Infrastructure

• Hyperbolic: AI agents autonomously pay based on GPU inference, achieving scalable workloads without manual management.
• OpenMind: The robot autonomously acquires computation and data, transforming physical agents into economic participants on the chain.
• PLVR: AI agents autonomously purchase event tickets, creating frictionless, instant fan engagement.

Agent Interaction

• Anthropic (MCP Protocol): AI models dynamically discover, retrieve, and autonomously pay for context and tools, showcasing truly independent agent interactions powered by x402.
• Apexti Toolbelt: Enables developers and agents to leverage (or dynamically launch) over 1,500 Web3 APIs through MCP servers supporting x402, seamlessly monetizing each API call within a single prompt.
• NEAR AI: Simplifying blockchain integration for AI applications to enable autonomous economic interactions without complexity.

• "Our vision is to combine x402's frictionless payments with NEAR's intentions, allowing users to confidently purchase anything through their AI agents, while agent developers earn revenue through cross-chain settlements, thus making the complexities of blockchain invisible." — Illia Polosukhin, co-founder of NEAR.ai and a key inventor of the GPT underlying Transformer architecture.

Social and Communication

• XMTP: The messaging platform becomes the economic center - agents and users can seamlessly pay to join private groups, unlock exclusive content, or directly monetize their expertise in chats.
• Neynar: The AI agent seamlessly queries Farcaster's social graph and personal profiles, supporting innovative social applications and creative content generation.

• x402 transforms Neynar's Farcaster API into a purely on-demand utility – the agent can extract exactly the data they need, settle in USDC in the same HTTP 402 round-trip, and skip the API key or prepaid package entirely. This is a huge breakthrough for real-time, context-rich social applications. - Rish Mukherji, founder of Neynar

real-time data

• Chainlink: Built a demo using the x402 protocol, which requires USDC payments to allow users to interact with contracts on Base Sepolia, thus using Chainlink VRF to mint random NFTs.
• Boosty Labs: Demonstrating how AI agents can autonomously purchase real-time insights immediately (via X API and Grok 3 inference) - no API keys or human intervention required.
• Zyte.com: Agencies dynamically purchase structured web data, such as market insights and product listings, through small payments.

Easy Integration

• BuffetPay: Smart x402 payment, with built-in guardrails and multi-wallet control, simplifying secure and programmable payments.
• Cal.com: Automatically integrates scheduling and paid human-machine interactions directly into workflows, accessible to both agents and users.
• Cred Protocol: Provides a decentralized credit scoring infrastructure that allows AI agents to autonomously assess on-chain creditworthiness in real time.
• Fewsats: Built a lightweight proxy that allows for rapid adoption and testing of x402 without modifying the existing application infrastructure.

These pioneering examples illustrate how x402 transforms the network into a programmable economic platform, enabling a new generation of intelligent agents and dynamic services to trade, adapt, and evolve independently.

x402 is now open for developers, teams, and innovators to explore and integrate into their applications. Visit x402.org for complete documentation, working demos, official white papers, and GitHub resources.