Microtransactions are unworkable with traditional financial instruments. Electronic funds transfers and online credit card transfers must (by law) be reversible, and reversibility means cost to the issuer, which means fees for the merchant (in this case Cloudflare). Transactions under a dollar stop making financial sense, god forbid alone anything like a fraction of a cent.
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.
> 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.
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.