Cloudflare Introduces NET Dollar stable coin
cloudflare.com
cloudflare.com
Scary if it works out their way and Cloudflare becomes an even bigger giant.
[1] https://developer.mozilla.org/de/docs/Web/HTTP/Reference/Sta...
[1] https://developer.mozilla.org/en-US/docs/Web/HTTP/Reference/...
> Scary if it works out their way and Cloudflare becomes an even bigger giant.
Are you proposing that you do not share OPs sentiment, since there are larger companies?
- Cloudflare is smaller in market cap than you would think, they are not "big tech" as to how I would consider it
- have been them following for years and there is nothing atm. that would indicate of them being "evil"
Azure, AWS, Meta and probably even Alphabet
As opposed to all the other giants. Clouflare is the only one with the heft to take on Google, AWS, Azure, etc.
But certainly worth keeping an eye on, especially as they branch out into things like stable coins and payment processing.
Of course Cloudflare is riding the stablecoin hype here a bit. At least they are large enough they might be pull this off
Just to note, that Cloudflare is a public company which means that they have both internal and external auditors.
They definitely need to worry about fraud, but the first two things they need to worry about are sanctions screening (don't do business with the four countries the US doesn't like) and AML (anti-money laundering).
Stablecoins are a potentially huge vector for this kind of badness, so it would be unwise for Cloudflare to try to yolo this (but they probably will, because almost all tech companies try to work with finance this way).
Like, I hope this doesn't happen but I find it hard to believe that there won't be a concerted effort to get around AML using cyrpto.
Not just countries; a changing list of organizations and individuals as well.
> Issuers would be subject to the Bank Secrecy Act, and the Financial Crimes Enforcement Network (FinCEN) would be required to write tailored anti-money-laundering (AML) rules. S. 1582 would require that FinCEN facilitate "novel methods … to detect illicit activity involving digital assets." S. 1582 would require issuers to certify that they have implemented AML and sanctions compliance programs. The bill would prohibit anyone who has been convicted of certain financial crimes of being an officer or director of an issuer.
OFAC compliance is a regular thing in Internet companies. AWS and Cloudflare maintain blocklists designed to help other companies stay OFAC compliant and agree with US sanctions lists. These are all well-known.
Do you have any proof for this assertion or is it time to milk crypto cynicism for upvotes on this site again? The GENIUS Act (which regulates stablecoins) specifically calls out complying with AML and sanctions lists. So there's a clear regulatory regime.
Look, it's a fact that lots of criminals use cryptocurrency (see all of the ransomware attacks over the past decade). Secondly, crypto has 100% been used to get around capital controls (particularly in China some years back).
I assume that internal drug syndicates are using crypto (as it makes sense for their business).
Now, what do stablecoins offer here? Simply put, if you send your crypto to some stablecoin issuer, then you can redeem for fiat. There's clearly substantial ML risks here, and more particularly lots of unsophisticated (from an AML perspective) counter-parties here. More specifically, the models used for transaction monitoring and reporting are less likely to pick up on the signals associated with crypto ML/crime activity.
Like, this seems super clear to me, and I'm not making any value judgements here (personally I think that stablecoins/crypto are mostly turning into regulatory arbitrage, but that's not germane to my point here).
> The GENIUS Act (which regulates stablecoins) specifically calls out complying with AML and sanctions lists. So there's a clear regulatory regime.
You should look at the penalties for getting this wrong. Particularly in OFAC, they are no joke (personal responsibility for issues). And untested regulatory regimes tend to get altered based on what happens in the market, and this is gonna be a wild ride.
The point I'm trying to make is that there's loads of dirty money in crypto (I think that's fair given all the ransomware). Banks/financial institutions who support crypto off-ramp are gonna be hard pressed to determine how much of the crypto assets they see are legitimate vs criminal.
So, the likely outcome of lots of crypto/stablecoin providers with fiat off-ramps is that it provides a way for this dirty money to get laundered into clean fiat/assets. This is gonna be a real headache for these providers, and I really can't see how they ever do due diligence/AML/KYC on all of this money.
That being said, dirty money has always and will always exist (barring some totalitarian global state) so this isn't a new problem, just one that I think will be concerning for financial institutions and regulators.
I agree with you that we're moving away from banner ads to some novel way of monetizing traffic, and therefore content published by authentic human beings.
Or those could be separate options
I wonder if micropayments had been solved before taking the easy route, we would have been in a much more healthy global scenario today.
Layers and layers of technical bullshit that never addresses the fact that no government in the world wants to allow frictionless peer to peer payments across borders.
CF is likely building this to service an internal need to collect micropayments for some kind of pay to view "captcha", and all the rest is just highly paid PR spin.
Im not fully knowledgeable about banks, but i always thought the reason why regulation was so hard was because no one could agree on a common ground obvs each country wants to keep their moat with their own currency, but with crypto anyone can opt in at their own risk
Crypto is a just a tool that enables that. They have no interest whatsoever in democratization, self-custodial finance, or frictionless payments across borders for anyone but themselves.
Direct p2p payments a "hard problem" because it directly contradicts what we consider to be one of the central pillars of national sovereignty, control over your national currency.
Crypto as a whole is in denial about this because there is no path forward without expecting nations to either give up one of their most effective levers of control, or expecting them to turn a blind eye to external actors eroding that control in real time.
Denial about what national sovereignty means in regards to currency controls and what that means for crypto orgs who want to operate in the stable coin or off ramp space?
Plenty of examples of orgs either failing or entirely abandoning their crypto "principles" like privacy and decentralization just to get rubber stamped by various regulatory agencies.
It seems you are in denial about the rate of crypto rails adoption. Stable coins seem to be part of the US national strategy for creating some extra demand for US debt so this goes fully against your previous comment. Decentralized debt markets are growing. Wall Street is dipping its toes more and more in tokenization and more and more organizations are interested in that. That list goes on.
It’s frankly tiring to debate this on HN. The fact is, blockchains are just a technology so they are adopted in all sorts of of ways which sometimes align with decentralization ethos and sometimes not. Ethereum and Bitcoin seems to be getting more adoption, as bearer assets that are independent and have a predictable issuance rate, and in a world with so much debt they can only continue to gain more market share.
So I really don’t know where you’re coming from.
I dont have financial/economic knowledge to argue my point to a full extent, but ive been under the assumption that p2p payments was only hard because various countries could not find a common ground, not only because of keeping control , but also getting laws changed/passed in most democratic nations is hard and might not be worth the scrutiny, entities in charge of their country banking system and regulations also find it difficult to bring radical ideas
There has been a handful of items that have bypassed all of this way before crypto and that is precious metals & gem stones like gold, silver, ruby, emerald etc you could be in the middle of africa and you will find someone who will easily buy your gold. Crypto is just like this and instead of mother nature dictating for us what material is rare , we as the consumers decide which crypto protocol, dapp, token ,blockchain etc to use and with competiton a better or improved system will always arise and trading gold hasnt eroded control for most nations, people still want hard cash for their day to day.
Who exactly is "we" here? Because that's not true in a lot of (sovereign) countries in the world. Probably the most famous example being the Euro, and maybe the closest example to you is the United States Dollar which is an official currency in countries that have no control over the currency itself.
The CEO of coinbase recently said on a podcast that in the future, he expects stablecoins to wipe out all but ten currencies in the world.
This is a ludicrous statement that's gonna get Coinbase banned from many of these countries, and end up being subject to much, much more regulation than they expect.
Like, just because the US is currently pro-crypto doesn't mean that the rest of the global regulators have changed.
Control of the currency is one of the core governmental functions, I find it hard to imagine a world where governments are OK with this.
And more generally, if this is your plan, it's profoundly idiotic to say it in public before you've accomplished it, as you're giving your counterparties more time to adjust (which you probably don't want).
> Though my guess is that some smaller countries with less sophisticated monetary regimes may actually be excited about escaping the petrodollar world economy.
I find this unlikely, but we'll see I guess.
Are you not aware about the countries that are seemingly OK with this already? There are countries that don't have their own national currency and instead rely on United States Dollar, so obviously what you say doesn't always apply.
> I find this unlikely, but we'll see I guess.
Why? They're already in a "hard to imagine world" (from your perspective) since they don't have control over their own currency, wouldn't it be "easier to imagine" that they move to a currency no one control?
This is generally making the best of a bad situation. Like, I'm from a country that was pegged to another country's currency for a long time, and it caused lots and lots of problems.
Now, I'm part of a currency union, and that too causes lots and lots of problems. I'm not sure why any government would want to give up currency control to Coinbase/Tether/Stripe, like it's bad enough when there's another central bank on the other side, but a bunch of tech bros seems like a step too far.
> Why? They're already in a "hard to imagine world" (from your perspective) since they don't have control over their own currency, wouldn't it be "easier to imagine" that they move to a currency no one control?
This is not true, there's always someone in control. The notion of perfectly algorithmic currency is beloved of a lot of people, but what happens when this hits the legal system? Fundamentally either the service gets banned or the algorithm gets tweaked (which indicates that someone has control).
Many governments do not perform this function. The Eurozone is a shared currency standard and it's not like most Eurozone countries have a domestic currency and keep a liquid market of EUR <-> Domestic Currency to transact in the Eurozone. Their credits and debts are denominated in EUR.
Then there's countries that use other countries as legal tender, like El Salvador. There's countries that peg their currencies to other currencies like Gulf States to the USD and the CFA Franc Zone which pegs to the EUR.
So... there's plenty of world governments that do not control their own currencies.
> And more generally, if this is your plan, it's profoundly idiotic to say it in public before you've accomplished it, as you're giving your counterparties more time to adjust (which you probably don't want).
If you're going to call someone's plan idiotic it's best to get your own facts in order first. I mean this is the internet so you can say whatever you want and get internet points but some of us like to think in terms of facts.
I live in a Eurozone country, and while it's not ideal on balance it's been pretty good for us (except for all the bubbles caused by inappropriate interest rates). But it's been absolutely awful for Italy (who are large enough that they probably could support their own currency). And there's a strong argument that the real estate bubbles in the periphery of the Eurozone was driven by extra liquidity and interest rates tuned to get Germany out of it's slump.
But fundamentally the Eurozone is very very different from a stablecoin, particularly around governance and democratic control. To pretend that crypto is the same is pretty misleading. Who is the lender of last resort in crypto? Does anyone know? If you remember the GFC, this should worry you (at least it worries me).
> Then there's countries that use other countries as legal tender, like El Salvador.
How did that experiment with Bitcoin as legal tender go?
There's countries that peg their currencies to other currencies like Gulf States to the USD and the CFA Franc Zone which pegs to the EUR.
So the Gulf states are weird here, as they definitely have the cash to support their currency, but given that their major export is denominated in dollars it makes sense. Then again, I'm not particularly familiar with their economies, so the previous sentence is speculation (like all of this is).
The CFA franc zone is too small to support their own currency. Like, very few countries choose to peg to another currency unless they don't have enough hard assets to defend their currency. It's a least worst option kind of thing.
> > And more generally, if this is your plan, it's profoundly idiotic to say it in public before you've accomplished it, as you're giving your counterparties more time to adjust (which you probably don't want).
> If you're going to call someone's plan idiotic it's best to get your own facts in order first. I mean this is the internet so you can say whatever you want and get internet points but some of us like to think in terms of facts.
To be clear, I'm saying that the CEO of Coinbase was foolish to say this in a public forum. If I wanted to accomplish this, then I'd try to remain as quiet about it as possible while I was doing it, until it was too late to stop me. I think that's a strategic mistake on their part (assuming they want this happen). I'm definitely not calling you idiotic and apologise if that's what came across.
Interestingly enough, El Salvador uses US Dollars as legal tender. They were forced to stop treating Bitcoin as legal tender when they took a loan from the IMF (because the IMF viewed the instability of Bitcoin as a financial risk), but even before that only small pockets of El Salvador really used Bitcoin. Bitcoin is still usable but not required and I think it's still the same small pockets that use it, often for attracting tourists.
As per NIST's recommendations[1] it seems like a blockchain doesn't make sense for this use case.
From where I stand it seems like Cloudflare is side-stepping the scrutiny, regulations and perhaps most pertinently the cost that would govern a similar offering using traditional financial instruments.
[1] https://csrc.nist.gov/CSRC/media/Projects/enhanced-distribut...
Almost every other project out there would be better off as a centralized project — heck, many of them are centralized, while claiming to hold on to the decentralized cyberpunk ethos — if not being outright scams.
It's not a path to riches (I can see a possible lifestyle business out of it), it's about giving people new opportunities.
I've been chewing on this for years and only now that Claude has shown up do I have a partner to help me make this work.
I do have some experience working on blockchain for a startup (non-ICO) that helped inspire me, but the experience itself bordered on being PTSD-inducing. The people I worked with were True Believers of Crypto, but the product we were building used crypto solely to tell their investors it was a blockchain company -- not that their product leveraged it at all.
In 2024 Congress signed a law that the transfer of digital assets does NOT count as an electronic funds transfer. This was a huge legislative victory for crypto, which had previously sat in regulatory limbo. The reason why you didn't see anybody using cryptocurrency as, well, currency, and its only use seemed to be as a speculative asset, was because nobody was sure if transferring crypto counted as an EFT, and the CFPB refused to make a decision one way or the other.
Why did Cloudflare choose to use cryptocurrency? They could technically use any digital asset. They could design their own custom digital asset used to facilitate transactions (hell, use Cloudflare stock as the currency), but they would just be reinventing cryptocurrency, but worse, and have to fight an uphill battle to get trust and adoption and risk regulatory scrutiny. A few months ago, Congress signed a law that provided a regulatory framework for stablecoins. These assets are "stable" because they are pegged 1:1 with USDs.
So, stablecoins have emerged in 2025 as the clear winner for microtransactions on marketplaces. No worrying about liability for reversibility. Clear regulatory framework (developing a custom solution risks a CFPB investigation). 1-1 USD backing makes customers trust you more, for good reason. AML checking and sanctions list checking happens at the currency conversion to / from USD, which dramatically simplifies your engineering, latency, and risk requirements.
https://netdollar.cloudflare.com/
> Will NET Dollar be fully backed?
> Yes, every NET Dollar will be fully collateralized by a U.S. dollar, ensuring transparency, reliability, and price stability.
Really? Backed by an asset that's depreciating at 3-4% annually? A money market fund, such as other stablecoins use, seems more likely. With billions of principal, every basis point of yield will be wanted. And the way to maximize is to hold commercial, not government, paper.
See "Reserve Primary Fund, 2008".
given, most traffic will likely be from ai agents, does it make more sense to try to hack agents into using credit cards, having shared social security numbers, opening bank accounts, dealing with chargebacks and slow settlement?
or
does it make sense to use technology that is
- internet native - programmable - near instant - secure - permissionless
the volatility issues are resolved through the use of stablecoins.
You let Cloudflare do things like that, and in a few years you will have to register with them using your passport to have the right to browse website. "For your safety".
But the better question would be, who should be the company (or entity) we should trust to do such a thing?
Cloudflare sits in the middle of a vast amount of web traffic now, offering easy global payments and skimming off the top of that is going to be very profitable potentially.
I don't trust Cloudflare, the larger they get the bigger the abuse potential becomes.
GCP: Earth Engine is quite good, but Google have multiple criminal convictions. As a repeat offender they should be avoided at all costs. They are just so exceptionally good at manipulating people, markets and academia it's genuinely terrifying.
Azure: Microsoft still don't take security seriously. They're just a bit bumbly, not really smart enough to be as terrifying as Google.
AWS: Pretty useful, annoying to use, distrust because I can't bear Amazon's use of dark patterns in consumer products.
Is the premise that it makes more sense for an AI agent to pay in prepurchased stablecoin tokens instead of direct access to a credit card?
PLUS just imagine how many corrupt politicians will be tempted to force these payments to go through their company.
I can't imagine all the low effort content farms that were providing things like dictionary definitions or ridiculously elongated ad-stuffed versions of kitchen recipes are doing too hot under the pressure from AI Overviews. And they can't be the only ones impacted.
That leaves Cloudflare well positioned to implement a pay-for-access check along with all of the existing bot services they offer. AI crawling goes from a threat to a win if I can serve OpenAI a demand to pay for each request. Bot abuse goes down if traffic isn’t free. Businesses like journalism become stable again if readers pay for content rather than relying on advertisers to subsidize it.
The gatekeepers (telecoms) first decided they were going to publish things themselves too, which had zero success, then to pay themselves more than anyone on the platform, then when that still didn't work they kicked everyone else off the platform with various excuses (porn, crime, getting money from outside the platform, promoting non-sanctioned shows, ... the big thing that was successful were mail and chatrooms)
The problem is that these companies were always willing (after a short while) to damage the economics of the infrastructure as a whole, just to increase their own share (for example per-email charges). Eventually they had close to 100% ... of nothing.
And the irony is that because of these companies constantly trying to move into content and apps, destroying their own system more and more by crude attempts to force people into their content the only thing that remains of these systems ... is publishers. They couldn't really improve their apps, since that cost them money. They quickly discovered to use money as a way to avoid friction on their apps ... and then no business leader ever approved removing friction anywhere.
For example: https://en.wikipedia.org/wiki/Minitel https://en.wikipedia.org/wiki/AOL
What could go wrong?
Until you don't.
There are dozens of examples of failed stable coins, to the point that they are now a meme in the crypto community.
People are confused because they usually can't distinguish between net emission and gross emission, if you hold a deposit or a loan, you have increased the gross amount of dollars in the economy, but of course you have created an equivalent liability. There's no semantic or technical difference between loaning a dollar, holding a dollar in deposit, or issuing a dollar-equivalent token.
The genius act will change how fintech and neobanks operate, so expect to see more companies offering similar services