Cloudflare is one of the biggest names in Internet infrastructure. It is a company that processes a significant amount of the traffic online. The leading cloud company is looking to help foster the next wave of innovation including providing a payment mechanism for AI agents.
My prediction was that stablecoin entry would explode once regulatory clarity was provided. This was dependent upon the US government since the dollar is the global reserve currency. We are seeing this enhanced by the fact that the overwhelming majority of stablecoins issued are USD denominated.
Cloudflare is the latest company to announce its entry into this realm. One of the key differences is this is a technology company, not a financial firm. So far, it is mostly banks that are entering the space (alongside the early adopters such as Circle and Tether).
It is uncertain how this will work considering the regulations against tech firms entering this arena.
Cloudflare Looking To Usher In Agentic Age With NET Stablecoin
Cloudlare provide website and network security. It also allows for the deployment of applications.
The next phase, according to the company, is the agentic world.
Many, including myself, theorize that the next generation of the Internet will be driven by agents. Person-to computer communication is going to dwindle. Instead, agents will operate on behalf of humans.
This is what the company posted on its website:
AI is fundamentally changing how humans interact with the web. Instead of driving every interaction themselves, humans are beginning to delegate tasks to autonomous AI agents to book a flight, order groceries, manage calendars and more. For this to happen, the underlying financial system will also need to evolve. The AI-driven Internet will need money that is instant, global, and secure so that AI agents, developers, and creators can transact instantly, automatically, and reliably.
Here is where we can surmise a complete transformation for the online world. As agents perform more tasks, the capabilities expand.
Of course, there will be times when commercial activities are involved. For this reason, payments will be required. Agents operating on behalf of individuals will have access to digital wallets, being able to handle the operation from start-to-finish.
This is what Cloudflare seeks to enter. It believes that is can put forth a new set of rails to assist in the upcoming agentic age.
NET is the stablecoin that its network will utilize.
The End of Banks
The banks are digging in. They are already issuing threats about the crash of the financial system if certain aspects of the GENIUS Act are allowed to stand.
One is the payment of interest on stablecoin holdings by third parties. While it was banned directly from issuers, companies like Coinbase found a path around that. Now the banks are upset that non-banking institutions can do this.
Then we have the fact that this is a technological world, one that the banks cannot compete. FinTech has two decades of eating market share from the banks. They now claim that, if demand deposits drop, lending costs will skyrocket.
In a vacuum, this might be the case. However, the opposite is likely to happen as a host of financial services are being built, including on decentralized platforms. This means that costs could likely decline is customers (users) have more options.
One major consideration is what Elon Musk and X could be doing. He is not constrained by the GENIUS Act since X is not publicly traded. Hence, that platform could issue a stablecoin without issue.
Going further, what happens if the likes of Meta and Google enter the race? These companies have billions of monthly users around the world. Having a wallet tied to their accounts would make for seamless transactions across their applications.
One thing we know, and Cloudflare is well aware of this, the agentic age is not going to be connected to bank accounts, at least not in their present form. We will see digital wallets become the norm.
Here is where banks have to adapt. Their infrastructure will quickly be made obsolete. New networks are former, which are faster and less expensive to operate. With DeFi starting to gain some traction, we see how competition is coming from every direction.
When it comes to eyeballs, banks do not have it. This should be a major concern to those institutions.
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Interesting move by Cloudflare 👏🌐 — do you think their NET stablecoin can really reshape AI-driven payments?”
Finally a new stablecoin! ... 🙄