Crypto & Blockchain

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.”

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Ramp will expand its issuing partnership with Stripe, a programmable financial services company, to launch the industry’s first stablecoin-backed corporate cards with fully integrated spend management software. Together, these companies are setting a new standard in global commerce by making cross-border transactions dramatically easier and faster. By working with Stripe to extend Ramp’s platform to previously unreachable markets, businesses in emerging economies will gain access to the same advanced financial tools that have helped over 30,000+ U.S. companies save billions of dollars and millions of hours. This combination of stablecoin-backed cards and Ramp’s powerful financial platform will accelerate business growth and commerce in regions that need it most. The integration enables issuance of new card programs in multiple countries at once, starting with select Latin American markets. Ramp and Stripe’s stablecoin-backed corporate cards offers businesses dramatically faster settlements, lower costs, built-in protection from currency volatility, and seamless card issuance — enabling global growth without global headaches: 1) Fund: Businesses can fund a wallet with Ramp using local currency, which is converted to stablecoin, or by depositing stablecoins directly. 2) Transact: Card purchases work as standard local payments. The cardholder simply pays in their local fiat currency, and the merchant receives fiat currency. 3) Protect: Funds are held in dollar-equivalent value, shielded against local currency devaluation. 4) Simplify: With Ramp’s corporate card, businesses can also access Ramp’s full suite of spend management and financial automation tools globally.

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The next five years will likely see stablecoins substitute for some overseas and domestic U.S. currency holdings, according to a Citi Future Finance report. “We’re looking at the integration of stablecoins into what you call the mainstream economy,” Ronit Ghose, the global head of Future of Finance, Citi Institute, said. The stablecoin market size is currently around $240 billion, led by Tether’s $145 billion USDT and Circle’s $60 billion USDC. In Citi’s base-case prediction, stablecoins will grow to $1.6 trillion by 2030, provided regulatory support and institutional integration take hold. In the bank’s more bullish scenario, the market could balloon to $3.7 trillion. (The global cryptocurrency market cap today stands around $3.45 trillion.) “Payment companies are leveraging stablecoins for a variety of pure-play payment flows, including cross-border transfer, remittance, merchant settlements and others,” CEO Michael Shaulov said. “Payment companies represent 11% of all of our clients, but 16% of the overall stablecoin transactions with over 30% growth of Q/Q in volumes. It is likely that this growth will continue, and they will represent 50% of the stablecoin volume within 12 months.”

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As AI agents take on more responsibility, and especially as the convergence between crypto and TradFi accelerates, worries around transparency and market manipulation will grow. DLT offers a solution. The Identity Management Institute reported companies that integrated blockchain identity systems have already cut fraud by 40% and identity theft by 50%. Applying these guardrails to AI-driven finance can counter manipulation and promote fairness. Moreover, the use of DLTs with fair ordering is growing rapidly, ensuring transactions are sequenced fairly and unpredictably, addressing MEV concerns and promoting trust in decentralized systems. A blockchain-powered, trust-centric model could unlock a new paradigm, “DeFAI”, in which autonomous agents can operate freely without sacrificing oversight. Open-source protocols like ElizaOS, which have blockchain plugins, are already enabling secure and compliant AI interactions between agents across DeFi ecosystems. As AI agents take on more complex roles, verifiable trust becomes non-negotiable. Verifiable compute solutions are already being built by firms like EQTY Lab, Intel and Nvidia to anchor trust on-chain. DLT ensures transparency, accountability and traceability. This is already in motion; on-chain agents are now operating that offer services ranging from trade execution to predictive analytics.

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During one of the panels at the U.S. Securities and Exchange Commission (SEC) roundtable on tokenization, incumbents were urged to avoid attempting to hamstring new technology players. Below is a summary of the key regulatory changes discussed. 1) Transfer agent modernization: While smart contracts handle transfers, participants believe a regulatory layer is still needed in the form of “tokenization agents” or “digital transfer agents” to help manage edge cases like wallet recovery, freezes, sanctions compliance, and complex corporate actions. 2) Blockchain as official record: Participants emphasized that permissionless public blockchains should be recognized as an official record of ownership. This would eliminate duplicative off-chain record keeping, streamline operations, and unlock efficiencies. 3) Broker-dealer framework: Several participants argued that tokenized securities with embedded transfer restrictions through smart contracts should meet the 15c3-3 possession and control requirements, making them eligible to be custodied and traded by broker-dealers without triggering the “three step process” (special purpose broker-dealer requirements). 4) Self-custody options: Panelists advocated that self-custody should be permitted when chosen by investors, noting it enables direct access to innovation, reduces intermediary fees, and supports user control without compromising regulatory oversight. 5) Stablecoin settlement: Participants argued that tokenized securities should be able to be settled using stablecoins, just as cash is used in traditional finance, “without imposing extra regulatory burdens simply because the payment rails are digital.” 6) Investment Company Act adaptations: Specific areas mentioned include Single book of record at transfer agency level; Access and disclosure requirements for investor communication documents; Many mutual funds are considering dual share classes – ETF shares. These funds could also potentially be tokenized; Forward pricing rule (Rule 22c-1) modifications if 24/7 trading is implemented 7) Interoperability guidelines: Participants suggested that while industry should lead interoperability efforts, the SEC could provide high-level guideposts or considerations about what interoperability should accomplish and what factors might undermine it, creating “a common set of principles” for dialogue. 8) Regulatory sandbox/pilot programs: There was strong support for formal regulatory sandbox or pilot programs to allow firms to use DLT for issuing, trading, and settling tokenized securities. Participants emphasized these should be practical rather than experimental, focused on directly informing new rules and legislation rather than just testing technology capabilities, which are already proven. 9)  Global regulatory coordination: Several speakers highlighted the need for global policy maker coordination and collaboration since technology is cross-border, and regulatory regimes need to recognize tokenized assets as they move across jurisdictions. The panel emphasized that innovation in this space could bring significant efficiencies to capital markets while maintaining investor protections, but requires thoughtful regulatory adjustments to realize its full potential.

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Soneium has announced a collaboration with real world asset (RWA) tokenization blockchain Plume, aiming to make tokenized Treasuries and private credit available to Soneium users. At a practical level, there’s Sony Bank, a digital only bank that has already offered its customers NFTs as rewards as well as tokenized assets, mainly in the form of real estate to date. Hence, apart from direct users of the Soneium blockchain, Sony Bank customers would make a good audience. But before that happens, the Plume network needs to launch, which is rumored to be imminent. Plume is a permissionless Layer 1 blockchain, that’s compatible with Ethereum and dedicated to tokenization. “The ability to offer access to real-world yield through tokenized assets is a major step forward in making blockchain services relevant to mainstream financial use cases,” said Ryohei Suzuki, Director of Sony Block Solutions Labs. “This partnership with Plume unlocks a compelling new layer of value for our ecosystem and users.” One of the challenges with the proliferation of blockchains, is the need to move assets between chains. Plume has a solution it refers to as SkyLink which uses LayerZero. For this partnership it would involve either burning or locking a token on the Plume network and simultaneously minting or unlocking a token on the Soneium network.

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