Akshar Prabhu Desai is a Silicon Valley-based fintech engineer currently working for Google and is an expert in Fintech and AI.
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Stablecoins refer to digital currency that is backed by fiat currency or liquid equivalents like U.S. Treasury bonds, and their value is pegged to this underlying asset. They solve the important problem associated with cryptocurrencies that is their dollar value fluctuation. However, the real advantage of stablecoins is that they settle in near real time and have very low transaction costs mostly because there is a single entity issuing and managing the lifecycle of a stablecoin.
Traditional money movement (e.g. credit card payments) in contrast is a two step process. The authorization is an instant step where the payment gets authorized and settlement is a slower step where the money is confirmed to have moved. This process also involves several intermediaries such as acquirer, network and issuer each of which might take a commission which increases the transaction costs. This model becomes even more complex and expensive as the payment happens to be cross-border payments.
Legacy payment methods hence are inefficient when it comes to small transactions. This has resulted in an online economy where all transactions have to be above a reasonable value. A practical example of this is online news subscriptions. News websites often offer a monthly plan for a few dollars to access all their content. However, consumers who might be interested only in one article might be willing to pay a few cents for that article but not willing to get a monthly subscription. It is not economical for the news website to charge the user a few cents based on access as the transaction fees are going to be higher than the transaction value. This economic floor limits economic activity. But if micropayments are viable then it enables a shift from subscription-only models to pay-per-use micro-economies.
The GENIUS Act, recently passed by the US Congress, provides a critical signal that stablecoins have federal backing. This legislation offers the market confidence and regulatory certainty needed for mass adoption
Stablecoins bring opportunities of this new form of monetization called micropayments. Since stablecoins can settle transactions in real-time and transaction costs are expected to be significantly lower, it is possible to profitably charge a small amount. These fees could be in cents or even in fraction of cents.
Additionally, stablecoins can be seen as programmable money. Unlike traditional money which once transferred belongs to the party that received it, programmable money can have inbuilt instructions about how the money might be used. For example, a programmable money wallet might have an instruction embedded in it that it can be transferred only if the merchant is categorized as a “Food” merchant. Despite the advantages, stablecoins still have not found enough application for their mass adoption.
However, the recent advancements in AI and more specifically Agentic AI has opened up potential use cases where stablecoins might get preferred. This is the area of Agentic Commerce or Agentic Payments.
Agentic payments are financial transactions initiated and executed autonomously by an AI agent on behalf of a consumer. These are machine-to-machine payments done without any human oversight and through complex AI processes. An example could be a self driving car paying for a few minutes of charging or a shopping agent buying groceries on your behalf by automatically monitoring your pantry.
Since AI agents can perform many steps and make high frequency payments, there is a need for a real time payment system that does both authorization and settlement in real time. Additionally, explainability and audit trail are desirable properties of any agentic system and stablecoin transactions are inherently transparent and easier to audit than opaque legacy ledgers.
Agentic payments and stablecoins thus present an opportunity for synergetic relationships. Stablecoins can solve important challenges of agentic payments related to profitable micropayments while also benefiting from large scale adoption. This is further proven by the fact that large companies including Google have shown support for this.
Google’s recently released open Agentic Payment Protocol (AP2) standard also supports a stablecoin extension x402. This extension would enable stablecoin integration with AP2. The number 402 here is a nod to the otherwise rarely used HTTP status code 402 which indicates that the client must make a payment to access a web resource. While status code 404 (page not found) is well known 402 is used very rarely.
The coalition of over 60 large organizations—including major payment processors, international banks, and leading tech firms—backing the protocol signals a serious, industry-wide belief in its necessity. As adoption increases, this shared "language" for payments will be the key to finally harnessing the full, transformative capabilities of agentic commerce.
AP2 provides three important properties to enable agentic payments.
- Authorization: Ensuring an entity making a payment is authorized to do so.
- Authenticity: Verifying that the transaction is intentional and not spoofed.
- Accountability: Establishing a clear audit trail to hold the correct parties responsible in cases of fraud or error.
It can handle both real-time and offline payments, and it supports everything from "human-in-the-loop" transactions that require user approval to completely autonomous payments for truly agent-driven tasks.
As per McKinsey research, US B2C commerce could see up to $1T of orchestrated revenue from agentic commerce by 2030. The global projects for these are between $3T to $5T. Furthermore McKinsey research US dollar pegged stablecoins are already doing $27T worth of transactions per year. Stablecoins currently are responsible for less than 1% of total daily transactions.
Growing agentic commerce could serve as a launching pad for stablecoin adoption. If there are compelling use-cases stablecoins could be more widely adopted and agentic commerce could benefit from the smart contracts, real time settlement and improved audit capability. This will unlock more possibilities to generate additional value for the economy. In short, the coming few years might be the year of agentic micropayments enabled by stablecoins.
