Why did Cloudflare cross over to launch its own stablecoin NET Dollar?

Article | Sleepy.txt

Editor | Kaori

Original Title: The internet service you use every day has just launched its own stablecoin.

You may not have heard of Cloudflare, but as long as you are online, it is almost impossible to avoid its services.

This company is the "invisible giant" in the internet world. Whether you are ordering takeout, scrolling through short videos, checking your email, or logging into a company system, there is a high probability that you are passing through its network. It acts like a massive digital shield and accelerator, providing security protection and content distribution services for nearly one-fifth of the websites globally.

When the web pages you visit open in an instant, and your favorite applications can withstand hacker attacks, there is often the presence of Cloudflare behind them. It is the true "electricity, water, and gas" of the internet, supporting the efficient and secure flow of global data as the underlying infrastructure.

On September 25, Cloudflare made a landmark strategic decision to extend the landscape of its infrastructure into a whole new dimension, announcing the launch of its own stablecoin - NET Dollar.

Why issue your own stablecoin?

Cloudflare CEO Matthew Prince provided the answer, "For decades, the internet's business model has been built on advertising platforms and bank transfers. The next era of the internet will be driven by pay-per-use, micropayments, and microtransactions."

Cloudflare's annual revenue exceeds $1.6 billion, processing trillions of requests daily, making it the fundamental utility of the internet. However, in this vast digital network, payments are the only aspect not under its control. This sense of loss of control is increasingly troubling large enterprises.

Apple settles hundreds of billions of dollars for App Store developers every year, Amazon processes massive cash flows for third-party sellers, and Tesla maintains payment transactions with over 3,000 suppliers worldwide. All these giants face the same friction: lengthy settlement cycles, high fees, and complex cross-border compliance. More critically, they have lost control over the most crucial closed loop.

As business becomes increasingly digitized and automated, this lagging financial infrastructure has become a bottleneck. Thus, large enterprises choose to respond in a more direct way: if the old system cannot be changed, then they will build a new one themselves.

Why Large Companies Need Their Own Stablecoins

The emergence of NET Dollar prompts a rethinking of the motivations behind stablecoin issuance. Unlike products like USDT and USDC, which pursue universal circulation, Cloudflare's approach to issuing tokens is more pragmatic, aiming to first solve payment issues within its own business ecosystem.

The differences behind this are significant.

USDT and USDC initially targeted the entire cryptocurrency market, relying on widespread acceptance to accumulate scale; whereas NET Dollar currently seems more like an "internal currency" tailored for Cloudflare's business network.

Of course, the boundaries are not fixed. PayPal's PYUSD is a typical example; when it was launched in 2023, it only served PayPal's own payment system, but now it supports exchanges with hundreds of cryptocurrencies, far exceeding its initial scope.

Stablecoins for enterprises are likely the same, with the opportunity to move from internal efficiency tools to broader circulation scenarios.

The key difference lies in the motivation. Traditional stablecoin issuers primarily rely on reserve investments for profit, while enterprises issue stablecoins to optimize processes and gain control. This different starting point will determine their differences in design, application, and future paths.

For large companies, payments have always been the "last mile" of the business closed loop, but this section is controlled by banks and payment institutions, and there are the problems mentioned at the beginning of the article. Thus, internalizing payments into their own system and rebuilding a controllable closed loop with stablecoins has become a strategic choice for large companies.

The true value of stablecoins for enterprises lies not in pursuing inflated narratives, but in their ability to cut through pain points in processes like a scalpel, greatly enhancing efficiency.

In supply chain finance, this value is easier to see.

International supply chain finance itself is a system full of friction. A payment from the United States to Vietnam must cross multiple time zones, various currencies, and several banks. According to data from the World Bank, the global average remittance cost is still over 6%.

Average transaction cost of remittances to specific countries/regions (%) | Source: WORLD BANK GROUP

Stablecoins for enterprises can compress this process to the level of minutes. American companies can directly transfer payments to suppliers in Vietnam within a few minutes, reducing costs to less than 1%. The time funds are in transit is significantly shortened, thereby improving the overall turnover efficiency of the supply chain.

More importantly, the ownership of settlement power has also changed.

In the past, banks acted as intermediaries, controlling the speed and cost of transactions; whereas in the stablecoin network, companies can take the lead in this critical aspect.

In addition to efficiency, cost is also a burden that enterprises cannot ignore. Exchange rate losses, bank processing fees, and card organization channel fees in cross-border payments may seem like minor expenses, but when accumulated, they can erode a company's competitiveness.

The significance of corporate stablecoins lies in this: they bypass traditional financial intermediaries and restructure the cost structure. The change is not only in the absolute reduction of amounts but also in the simplification and transparency of the structure. Under the traditional model, companies face a complex fee system, including fixed fees, percentage fees, exchange rate spreads, and intermediary fees, with opaque calculation methods that make precise predictions difficult.

In the stablecoin network, the costs almost boil down to one item: the on-chain transaction fees. They are public, predictable, and relatively stable. As a result, businesses can calculate their expenses and profits more accurately, making their decisions more confident.

Comparison of Traditional Financial Global Payment Links and Stablecoin Payment Links | Source: SevenX Ventures

Furthermore, the management of cash flow itself can be transformed. Traditional practices rely on manual operations and banking systems, which are complex, inefficient, and prone to errors.

When stablecoins are combined with smart contracts, the flow of funds can be automatically executed according to preset conditions. After the supplier delivers and passes acceptance, the payment is automatically released, and when the project reaches a milestone, the corresponding funds are disbursed immediately. Companies no longer have to manually monitor accounts, but instead write the rules into the contract.

The changes brought about by this mechanism are not just improvements in efficiency. The transparent and immutable payment logic reduces the trust costs between the cooperating parties and also preemptively resolves potential disputes.

As more partners are included in the same payment system, the network effect begins to emerge. Vendors, distributors, partners, and even end users all settle in the same stablecoin, and the value of the network will increase exponentially.

This value is not only reflected in scale but also creates a locking effect. Once deeply integrated into a certain enterprise's stablecoin system, the cost of switching to other systems becomes high, not only in terms of the cost of technological transition but also in terms of learning, relationships, and even opportunity costs.

This layer of stickiness will become the most solid moat for enterprises. In fierce competition, companies with stablecoin ecosystems can not only better control costs and cash flow but also rely on network effects to consolidate long-term advantages.

How Stablecoins Can Enter Various Industries

Different industries have their own pain points, and enterprise stablecoins are being used as potential solutions. Although they may not have been widely adopted yet, they have already demonstrated the possibility of integrating into real business operations.

E-commerce Platform: Automation of Margin, Commission, and Refunds

For e-commerce platforms, stablecoins are becoming a testing tool for building a new generation of payment infrastructure. The partnership between Shopify and Coinbase allows merchants in 34 countries to accept USDC settlements, but this is just the beginning.

The deposit paid by merchants when settling in can be directly written into the smart contract, automatically deducted in case of violations, and refunded automatically upon contract expiration. The platform's commission can also be settled in real time; every time a transaction is completed, the system automatically transfers from the merchant's stablecoin account to the platform.

The refund process has also been reshaped. In the past, cross-border refunds often took weeks and went through multiple banking procedures; with stablecoins, the funds can arrive in just a few minutes, providing a completely different experience.

Furthermore, stablecoins can support micro-payment scenarios. Consumers can pay for browsing product pages, pay for personalized recommendations, and even pay for priority customer service. These fragmented transactions, which are almost impossible in traditional payment systems, can all be realized in a stablecoin environment.

Manufacturing Giants: A Unified Network for Supplier Payments and Inventory Financing

The degree of globalization in the manufacturing industry is the highest, and supply chains often span dozens of countries. For companies like Apple and Tesla, coordinating payments, financing, and margins for thousands of suppliers is itself a massive system engineering challenge.

If these companies issue their own stablecoins, they can establish an efficient and low-cost payment network internally. Payments to upstream suppliers, arranging inventory financing, and managing quality assurance deposits, which previously required cross-bank and cross-currency processes relying heavily on manual work, can all be completed instantly within the same network.

More importantly, this digital payment system can be integrated with the existing management systems of enterprises. When the ERP detects insufficient components, it can automatically trigger orders and complete payments; when the quality inspection system identifies problematic batches, it can also deduct funds from the supplier's deposit immediately.

Taking Tesla as an example, it has over three thousand suppliers spread across more than thirty countries. If stablecoins are used for unified settlement, suppliers can directly use "Tesla Coin", with Tesla responsible for the USD exchange. This not only reduces costs but also means having stronger control in critical areas.

Content Platform: New Paths for Revenue Sharing and Micropayments

The content industry is undergoing a reconstruction driven by creators. Whether it's short video platforms like YouTube and TikTok, or text platforms like Substack and Medium, the biggest challenge is how to efficiently and fairly distribute revenue to creators around the world.

Stablecoins are seen as a potential solution. They allow platforms to instantly settle revenue shares with creators globally, without relying on complex cross-border banking systems, and can also avoid high fees. Furthermore, micro-payment mechanisms allow for even finer distribution of earnings.

YouTube pays creators hundreds of billions of dollars in revenue sharing every year, but payment methods vary by country, exchange rate fluctuations impact actual income, and tax processes are extremely complicated. If the platform builds its own stablecoin network, it can achieve truly unified global settlement.

This mechanism may also give rise to new business models where readers can pay per article, viewers can pay for individual video clips, and listeners can pay for a song. More precise value distribution not only allows creators to receive more direct returns but also encourages them to produce higher quality content.

Cloud Service Provider: The Settlement Testing Ground for the Machine Economy

Cloudflare's NET Dollar can be seen as a typical case of a cloud service provider attempting to create a stablecoin. With the development of artificial intelligence and the Internet of Things, communication and transactions between machines are becoming increasingly frequent. They are characterized by high frequency, small amounts, and full automation, which the traditional payment system is unable to support.

In this scenario, an AI model might need to pay for calling the API of another model, an IoT device needs to settle the computing power it consumes, and a self-driving car needs to pay for map services. These payments may only be a few cents or even a few fractions of a cent, yet could be triggered thousands of times within a second.

Stablecoins, especially forms designed for algorithmic trading like NET Dollar, can support such high-frequency, low-value automated payments. Machines can autonomously decide the timing, amount, and recipient of payments based on preset rules, without the need for human intervention.

To this end, Cloudflare has partnered with Coinbase to establish the x402 Foundation, which develops a protocol that allows direct payments between machines. When one AI model calls the service of another model, the fees are settled instantly. This type of exploration is building the necessary payment infrastructure for the future machine economy.

Cloudflare developed x402 trial field real-time demonstration interface | Image source: Cloudflare

Stablecoin Exchange and New B2B Payment Network

Once every large enterprise issues stablecoins, the subsequent question is how these "corporate currencies" can interoperate. The answer points to a brand new B2B payment network.

In such a network, stablecoins from different enterprises can be seamlessly converted through swap protocols, which may technically rely on liquidity pools of decentralized exchanges. A vendor who receives payment in "Tesla Coin" can instantly exchange it for "Apple Coin" or US dollars, without having to go through the cumbersome banking system.

To make this system truly operational, there are several hurdles that need to be overcome.

First is the exchange rate pricing. How is the exchange rate between different stablecoins formed? This may require a pricing mechanism similar to the supply and demand of the foreign exchange market.

Secondly, there is the source of liquidity. Who will provide sufficient liquidity? Is it reliant on professional market makers, or is it through inter-company channels? There is no conclusion yet, and further exploration is needed in the industry.

Finally, there is risk management. How to prevent credit risk and operational risk during the exchange process? This is not only a technical issue, but also requires clear guidance at the compliance level.

Stripe has already started testing in this direction. In May 2025, it launched the world's first payment AI model and introduced a stablecoin payment suite. Businesses can simply activate it with one click on the platform to settle using USDC across multiple public chains such as Ethereum, Solana, and Polygon.

Stripe's approach is very clear: rather than issuing its own currency, it is better to enable more businesses to easily integrate stablecoin settlements, thereby becoming the underlying infrastructure for stablecoin payments.

What’s more interesting is that there may be the formation of "industry alliance stablecoins" within specific industries. For example, several major automobile manufacturers might jointly issue a type of "auto coin" that covers the entire chain of settlement from parts procurement to vehicle sales. This unified currency system can significantly reduce transaction costs and promote industrial collaboration.

The complexity of the automotive industry chain makes it the most suitable testing ground. A car involves tens of thousands of components, with suppliers spread across the globe. If the entire chain is settled using the same stablecoin, it can bypass the redundant processes of multiple currencies and multiple banks, greatly simplifying payments.

The advantages of stablecoins in the alliance are also very intuitive. The industry scale is sufficient to support liquidity, the trading model is standardized, and the closed-loop reduces the impact on the traditional financial system. However, challenges also exist, such as how to balance the interests of different enterprises, whether large enterprises will take the opportunity to strengthen control, and whether governance mechanisms can remain transparent; these can only be answered through practice.

All concepts regarding corporate stablecoins ultimately hinge on regulatory compliance. Whether it is a single enterprise or an industry alliance, genuine market acceptance can only be achieved by establishing transparent reserve custody, regular third-party audits, and sufficient disclosure to regulatory authorities.

In July 2025, the U.S. "GENIUS Act" will take effect, establishing clear legal boundaries for the issuance of stablecoins for the first time. Stablecoins with an issuance scale exceeding 10 billion dollars must be subject to federal regulation, with reserves limited to U.S. dollars, bank deposits, or short-term U.S. Treasury bonds, and completely isolated from the issuer's other assets.

In August of the same year, Hong Kong's "Stablecoin Regulation" officially came into effect. It requires issuers to maintain a paid-up capital of at least HKD 25 million, to accept ongoing supervision and annual audits by the Monetary Authority, and to establish a comprehensive system for anti-money laundering and customer identity verification.

For enterprises, compliance is not just a "must-do" requirement, but a prerequisite for gaining trust. Without transparent and credible reserve management, even the strongest business logic is hard to persuade suppliers, partners, and customers to follow.

Stablecoins and the New Commercial Order

The emergence of corporate stablecoins is not just a change in payment tools, but a precursor to the reorganization of future business order.

They deeply couple payment and systems, empowering devices and programs with independent economic capabilities. Autonomous vehicles can autonomously complete charging and settlement when power is low, and industrial robots can automatically place orders for procurement when parts wear out, thus machines transform from mere "tools" into real economic entities.

Micro-payments provide a new distribution logic for the content industry, where videos can be billed by the second, novels can be billed by the chapter, and software can be billed by functionality. Revenues are split more finely, and the incentive mechanisms change accordingly.

After the integration with artificial intelligence, the imagination space is further opened. Once AI agents have a stablecoin budget, they can autonomously procure data, computing power, or other services to complete complex tasks.

In September 2025, Google launched the Agent Payments Protocol (AP2), collaborating with sixty institutions to establish payment channels for AI agents, allowing them to settle payments directly while performing tasks. This means that AI will no longer just be a tool but will possess economic capabilities as "digital employees," forming a new collaborative relationship with humans.

For banks and payment companies, this is a structural challenge. If enterprises can build their own payment and settlement systems, the role of traditional financial institutions in cross-border settlement and treasury management will be weakened. In the future, banks are more likely to turn to roles such as reserve custody, compliance, and auditing, while payment companies will need to become providers of stablecoin infrastructure.

From a more macro perspective, corporate stablecoins may signify the emergence of a new commercial order. In this system, value creation and distribution will be accomplished with unprecedented efficiency, and business relationships will become more transparent and efficient.

From the Venetian bills of the Middle Ages to today's stablecoins, the logic has always been the pursuit of a more efficient medium of exchange. In this technology-driven transformation, any enterprise that wants to secure a place in the future digital economy cannot remain aloof.