Cloudflare Introduces Stablecoin for AI-Driven Web Transactions
U.S. cloud services provider Cloudflare, Inc. (NYSE:NET) announced plans to launch NET Dollar, a U.S. dollar-backed stablecoin. This development is intended to facilitate instant and secure microtransactions within the burgeoning "agentic web," an ecosystem where artificial intelligence (AI) agents conduct tasks and transactions autonomously on behalf of users. The initiative represents a significant strategic move for Cloudflare, positioning the company to modernize financial infrastructure for the evolving internet economy.
The Event in Detail: NET Dollar and the Agentic Web
Cloudflare aims for NET Dollar to enable a shift from the internet's prevalent ad-based revenue model towards a system predicated on pay-per-use, fractional payments, and microtransactions. This is particularly relevant for the "agentic web," where AI agents might automatically book flights, order groceries, or access data based on predefined conditions. Co-founder and CEO of Cloudflare, Matthew Prince, emphasized this shift, stating:
"The Internet's next business model will be powered by pay-per-use, fractional payments, and microtransactions—tools that shift incentives toward original, creative content that actually adds value."
The company intends for NET Dollar to provide an internet-native payment system that is fast, secure, globally accessible, and interoperable with existing financial rails. While specific details regarding banking partners or underlying blockchain technology were not disclosed, Cloudflare is actively contributing to open payment standards, such as the Agent Payments Protocol and x402, to streamline machine-to-machine transactions.
Cloudflare, a company with a market capitalization of $75.8 billion, has demonstrated robust financial performance. Its shares have seen impressive year-to-date returns of 102%, and the company maintains gross profit margins of 76%. Revenue growth stands at 27% year-over-year, with second-quarter 2025 revenue reaching $512.3 million, exceeding analyst consensus estimates.
Analysis of Market Reaction and Strategic Positioning
This strategic expansion into payments infrastructure for AI-driven services extends Cloudflare's influence beyond its traditional security and performance offerings. The introduction of NET Dollar aligns with a broader industry trend towards compensating content owners and API providers through granular, programmable, and usage-based payments.
Analyst firms have reacted positively to Cloudflare's strategic direction and financial health. Citizens JMP raised its price target for Cloudflare (NET) to $250, maintaining a Market Outperform rating, while Stifel reiterated its Buy rating with a price target of $230. These assessments reflect investor optimism regarding the company's potential to capitalize on the convergence of AI and Web3 ecosystems. The company's significant cash reserves, totaling $3.96 billion, provide ample resources for these ambitious investments.
Broader Context and Implications
Cloudflare's entry into the stablecoin market coincides with significant projected growth in the sector. A recent report from Citi, titled "Stablecoins 2030 - Web3 to Wall Street," substantially revised its projections, forecasting a base case stablecoin issuance of $1.9 trillion and a bull case of $4.0 trillion by 2030. This represents an increase from previous estimates and suggests that stablecoins could support nearly $100 trillion in annual transaction activity under the base case.
The report identifies 2025 as a "ChatGPT moment" for institutional blockchain adoption, with stablecoins serving as a catalyst for "smarter, faster finance," particularly for cross-border payments. The rapid rise in current stablecoin issuance volumes, from approximately $200 billion at the start of 2025 to about $280 billion, further underscores this momentum.
Regulatory developments, such as the passage of the GENIUS Act in the U.S. in July 2025, are providing increased clarity for crypto markets. This act regulates payment stablecoins, treating them similarly to electronic money and requiring one-for-one reserve backing, mirroring aspects of the EU's Markets in Crypto-Assets Regulation (MiCA). This evolving regulatory environment provides a framework for companies like Cloudflare to innovate within the stablecoin space.
Looking Ahead
The introduction of NET Dollar signals Cloudflare's ambition to be a foundational infrastructure provider for the next generation of the internet, driven by AI and microtransactions. Success will hinge on widespread adoption of NET Dollar by developers, AI agents, and users, as well as its ability to seamlessly integrate with diverse web services and payment rails. The coming months will likely see further details regarding the stablecoin's technical implementation, partnerships, and availability. The broader market will be closely watching for how this initiative impacts Cloudflare's revenue diversification and its competitive position in both the cloud services and emerging fintech sectors. Continued innovation in payment standards and regulatory alignment will be critical determinants of the "agentic web's" economic viability and the stablecoin market's trajectory.
source:[1] Cloudflare Unveils U.S. Dollar Stablecoin for AI-Powered Internet Economy (https://www.coindesk.com/business/2025/09/25/ ...)[2] Cloudflare plans to launch dollar-backed stablecoin for AI transactions - Investing.com (https://vertexaisearch.cloud.google.com/groun ...)[3] Cloudflare Unveils 'NET Dollar' Stablecoin To Power Agentic Web - Benzinga (https://www.benzinga.com/news/25/09/45200000/ ...)