Coinbase’s experimental x402 payment protocol, designed to allow AI agents and humans to pay with stablecoins directly over the internet, has seen an explosion in activity.
Important points:
- Coinbase’s x402 protocol saw a 10,000% spike in transactions, processing nearly 500,000 payments in one week.
- The protocol reinstates the HTTP 402 “Payment Required” code to enable instant stablecoin payments on-chain.
- Increased developer interest has prompted the launch of x402-powered tokens.
According to data from Dune Analytics, transactions on the payment protocol have surged more than 10,000% over the past month.
Coinbase’s x402 brings back HTTP 402 to enable instant on-chain payments
First introduced in May, x402 reimagines the long-defunct HTTP 402 status code “Payment Required” as a native Internet payments layer.
It enables automated, real-time transactions without credit cards or intermediaries.
A user or AI agent requests a service, receives a 402 payment prompt, submits a signed stablecoin payment, and the system validates it on-chain.
From October 14th to 20th, the protocol processed nearly 500,000 transactions, an increase of 10,780% from the previous month.
Activity peaked on Friday with 239,505 transactions, and Thursday saw a record $332,000 in trading volume.
This sudden surge comes amid increased attention to “Agent AI,” autonomous artificial intelligence systems capable of managing finances and resources, highlighted in a16z Crypto’s 2025 State of Crypto report this week.
The company predicted that these agents could drive up to $30 trillion in autonomous transactions by 2030.
Coinbase developers Kevin Leffew and Lincoln Murr explained in August that x402 could enable a new financial layer for digital agents, allowing them to pay for computing, storage, and even transportation without human intervention.
“They need atomic payments, programmable policies, and configurable wallets,” they write. “Ethereum and stablecoins offer just that.”
According to KuCoin Ventures, developers have also started launching new tokens using the x402 framework, sparking a wave of x402 meme coin projects.
This trend was strong enough that CoinGecko added “x402 tokens” as a separate category, which has since grown 266% in just 24 hours to a $180 million market.
Coinbase’s new protocol highlights a larger shift towards the integration of AI and on-chain finance, where machines will be able to process payments and data autonomously without third parties.
If adoption continues at its current pace, x402 could become the first practical bridge between AI systems and blockchain-based economic activity, a significant step toward what Coinbase once called “correcting the internet’s original mistakes.”
Coinbase faces intense scrutiny as vulnerabilities in AI coding tools expose security risks
Last month, an exploit in Cursor, an AI-powered coding assistant reportedly used by all Coinbase engineers, sparked widespread concern in both the cryptocurrency and cybersecurity communities.
The flaw, dubbed “CopyPasta License Attack,” was revealed by cybersecurity firm HiddenLayer and allows hackers to insert hidden markdown instructions that spread malware through developer files such as README.md and LICENSE.txt.
Once an attack is triggered, the entire codebase can be compromised with minimal user interaction.
HiddenLayer has demonstrated how this vulnerability can silently inject malicious code that can steal data, create backdoors, or modify critical systems.
The company said similar risks exist with other AI coding tools such as Windsurf, Kiro, and Aider. The disclosure comes shortly after Coinbase CEO Brian Armstrong announced that AI currently writes up to 40% of the company’s code, with plans to increase that number to 50%.
Critics, including developers and academics, have warned that Coinbase’s rapid AI deployment could put user assets and core infrastructure at risk.
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