Coinbase is moving its AI-driven payment protocol, x402, toward greater accessibility. The exchange is placing the protocol under the Linux Foundation, a prominent center for collaborative software development. This shift seems aimed at transforming x402 into a shared infrastructure. The goal is to invite the wider tech community to contribute to its development and governance, rather than keeping it solely within Coinbase’s walls.
The main goal is to create a system that can handle quick, low-value transactions. Traditional financial networks have trouble doing this efficiently because of the costs and time involved. To help steer this project, a new group has been formed called the x402 Foundation, comprising early participants like Cloudflare and Stripe, as well as several other major industry players.
x402 gains traction as AI agents drive the future of autonomous payments
The increasing interest in x402 is partly due to the rapid growth of AI-driven commerce, whereby software programs, also referred to as AI agents, can independently perform activities such as booking services, accessing digital content, and making payments.
In some quarters of the crypto sector, this has created immense interest in what is referred to as “agentic payments.” Agentic payments, as the name suggests, involve transactions that can be conducted independently without any human involvement.
According to proponents, programmable micro-payments based on blockchain technologies are particularly suited for this type of payment. The x402 protocol, created by Coinbase, is intended for this purpose. While AI is often utilized as an interface for an online checkout process, such as through chatbots, x402 is meant for enabling machines to independently conduct very small transactions.
It can make payments for fractions of a cent at very high frequencies, which is normally hard for traditional credit card systems to achieve efficiently due to fees and other limitations.
In order for the technology to scale and work properly on different platforms, the development of the project is taking place under the Linux Foundation.
x402 sets sights on becoming the SSL of AI payments
Essentially, Coinbase’s goal is to create an open-source system that helps minimize compatibility issues and promotes maximum participation in the industry. From a more technical standpoint, x402 seeks to be the standard for AI payments, just like the Secure Sockets Layer has become the de facto standard for securely connecting web servers and web browsers across the world-wide-web.
The drive to create x402 as an open standard has been fueled by the collective belief in the tech industry that the next generation of digital commerce, especially in the realm of AI payments, should not be owned by one entity.
According to Jim Zemlin, CEO of the Linux Foundation, “One of the reasons the Internet has grown at the rate it has over the past few decades is because it was built on open protocols that anyone could use, modify, and make better. The Linux Foundation’s approach to x402 is to use an open model to ensure the technology improves in an open and compatible way.”
Practically, this approach is intended to ensure that no fragmentation occurs and to promote widespread adoption with the growing occurrence of AI-powered transactions.
A press release by Coinbase points out that the x402 Foundation is generating interest from a broad range of major players in the industry, including those focused on payments, cloud computing, and digital infrastructure. These include Amazon Web Services, American Express, Google, Mastercard, Microsoft, Shopify, Visa, and blockchain-focused organizations like Polygon Labs and Solana Foundation.
The range of organizations supporting this initiative shows that the excitement over AI-native payment infrastructure is not limited to crypto organizations but is shared by traditional finance, big tech, and e-commerce organizations.
Industry leaders have emphasized that this collaboration is important since agentic commerce, where AI autonomously conducts transactions and payments, necessitates cloud infrastructure that is not only secure but also compatible.
James Tromans emphasized that the involvement of Google Cloud with the x402 Foundation is consistent with the company’s mission to be a champion of standards that allow different platforms to communicate and safely conduct transactions.