Coinbase Launches x402 Protocol for On-Chain Payments via HTTP

Coinbase has introduced an innovative open-source protocol named x402, designed to facilitate on-chain payments via HTTP. This groundbreaking system repurposes the previously unused HTTP 402 “Payment Required” status code to enable direct machine-native payments using stablecoins. The announcement, made on May 6, marks a significant step forward in the integration of blockchain technology with traditional web infrastructure.

The x402 protocol is engineered to support autonomous agents and applications, allowing them to pay for API access, data, and services without the need for human intervention, subscriptions, or traditional payment infrastructures. This capability opens up new possibilities for business models and use cases, particularly in sectors that require microtransactions for content access, data retrieval, and AI inference.

The core design of x402 allows a server to issue an HTTP 402 response with payment instructions when a client requests a paid resource. Upon receiving the payment requirement, the client—whether a human user or an autonomous agent—can initiate an on-chain transaction and retry the request with a signed payment. This architecture makes per-use monetization technically feasible and economically viable, as it enables microtransactions for various services and resources.

Currently, x402 is available as an open standard with a reference implementation on Coinbase’s GitHub and developer site. The exchange has plans to open the roadmap for community contributions and decentralized governance in upcoming iterations. This collaborative approach aims to foster innovation and ensure the protocol's adaptability to evolving technological landscapes.

The x402 design supports frictionless micropayments across various sectors. In practical terms, AI agents can pay for API access per call, monetize content per article or stream, and sell cloud computing resources by the second or gigabyte. The project’s white paper outlines real-world use cases, including per-play gaming models, per-inference AI services, and per-article paywalls for publishers. These applications demonstrate the protocol's potential to revolutionize how digital services are monetized.

The protocol also aims to simplify compliance and operational burdens by eliminating the need for PCI certification and exposure to chargebacks. Once confirmed on-chain, all transactions are final, and payment processing is entirely decentralized. This feature enhances security and reduces the administrative overhead associated with traditional payment systems.

According to the project’s white paper, x402 addresses long-standing inefficiencies in existing payment systems that rely on account-based setups, delayed settlement, and centralized control. Traditional payment methods such as ACH and credit cards introduce latency, chargeback risk, and human-driven onboarding steps, all of which are incompatible with machine-to-machine (M2M) applications or autonomous AI workflows.

By contrast, x402 enables low-latency, irreversible payments with settlement times averaging 200 milliseconds when deployed on rollups. The protocol executes payments using stablecoins, with a chain-agnostic design that allows support for multiple blockchains and tokens. Additionally, x402 facilitates real-time revenue collection through client-server communication that directly integrates signed payments into HTTP requests, eliminating the need for API keys, pre-registration, or manual invoicing.

The x402 protocol supports a JSON payment request format embedded in the HTTP 402 response. To prevent replay attacks, the server specifies payment details, including the recipient wallet address, network identifier, asset contract address, payment expiration, and a nonce. Clients respond by signing a payment authorization using the EIP-712 standard, which is broadcast on-chain to complete the transaction. EIP-712 defines a framework for structuring, hashing, and signing typed data, aiming to make data signing on Ethereum more human-readable and verifiable.

Coinbase provides middleware libraries for Node.js and browser environments, allowing integration with one line of code. The x402 structure also uses wallet interfaces to confirm payments, providing complete transparency into the transaction’s cost, asset, and destination. Developers can access testing environments with mock APIs and wallets and support for batched settlements, layer-2 blockchains, and payment channels. This comprehensive support ensures that developers can seamlessly integrate x402 into their applications, fostering widespread adoption and innovation.

In summary, the x402 protocol represents a foundational change to how internet services interact with money by presenting on-chain payments via HTTP. This innovation has the potential to transform various industries by enabling efficient, secure, and decentralized payment solutions. As the protocol continues to evolve with community contributions and decentralized governance, it is poised to become a cornerstone of the future digital economy.