Coinbase’s x402 Protocol Records 10,000% Growth in October

Coinbase Exchange’s experimental x402 payments protocol has recorded a 10,000% jump in transactions this month. This sudden rise reflects the growing attention on autonomous artificial intelligence systems, often called agentic AI. 

These systems can manage finances, contracts, and resources without human interference. 

x402 Sees Record-Breaking Growth

The x402 payments protocol allows both people and Artificial Intelligence (AI) agents to send payments directly in stablecoins across the internet. It is built around Coinbase’s old HTTP 402 status code, which originally meant “Payment Required” but was never used. 

The exchange has turned this code into a working payment layer that supports real-time transactions without using credit cards, banks, or other intermediaries.

As reported, between October 14 to 20, x402 processed almost 500,000 transactions, marking a 10,780% jump from the previous month. On October 24, it reached a record $332,000 in total transaction volume. 

The highest daily activity came on the following day, when it recorded over 239,000 transactions. This shows that Coinbase’s x402 protocol is quickly gaining traction. A report from a16z Crypto predicted that these systems could handle up to $30 trillion in automated payments by 2030. 

Developers Embrace x402

Coinbase introduced the x402 protocol in May 2025 to enable direct, automatic payments between humans and machines. When an AI system or user requests a service online, the protocol sends a payment request using the “402” signal.

The user or AI agent then sends a stablecoin payment, which is verified instantly on the blockchain without relying on traditional payment networks.

This new system makes it possible for AI to automatically pay for things like cloud storage, computing power, or transportation. Every payment is recorded on-chain, making the process fast, secure, and transparent.

Speaking on the topic, Kevin O’Leary said that the mix of AI and blockchain will spark the next big change in how businesses work.

Security Concerns in Coinbase’s AI Push

While Coinbase pushes innovation, it is also facing new security risks. Recently, cybersecurity researchers discovered a flaw in cursor, an AI-powered coding assistant used by Coinbase engineers. The issue, called the “CopyPasta License Attack,” allows hidden malware instructions to be added to simple text files 

If activated, the attack can infect entire codebases, allowing hackers to steal data, alter systems, or create hidden access points. Experts warned that similar issues may exist in other AI tools like Windsurf, Kiro, and Aider.

The report came months after Coinbase CEO Brian Armstrong said that AI now writes about 40% of the company’s code, with plans to raise that number to 50%.
Developers and security professionals have warned that this fast adoption could put user funds and company systems at risk if the right protections are not in place.