Crypto exchange Coinbase has unveiled the x402 protocol to automate online payments with stablecoins, allowing direct transactions from holder to merchant without intermediaries. The protocol will be particularly useful for AI agents to pay for digital items automatically, but can serve any service requiring micropayments – essentially functioning as the online version of automated toll payments. Applications could include API usage, online content, flights, or computer resources. While designed for direct payments, various intermediaries will likely emerge to simplify the process for merchants. The key is that there is no need for an intermediary. The stablecoin payment goes directly from the holder to the merchant. That said, any number of intermediaries will pop up to make it easier for merchants. When browsing the web, if we come across a missing web page it often shows a 404 error. An error code that we never see is the 402 error, which says there’s a paywall and you need to make a payment. Coinbase is using this to build a protocol for payments to make it as seamless as sending a tweet. “We built x402 because the internet has always needed a native way to send and receive payments—and stablecoins finally make that possible,” said Erik Reppel, Head of Engineering at Coinbase Developer Platform. “Just like HTTPS secured the web, x402 could define the next era of the internet; one where value moves as freely and instantly as information. We’re laying the groundwork for an economy run not just by people, but by software—autonomous, intelligent, and always on.”