Why Your AI Agent Needs a Wallet: USDC and Nanopayments — Harshal Bhangale, Circle

Why a stablecoin company is at an AI conference

00:12Good morning everyone. So um I've had the pleasure of u meeting a lot of folks at uh the booth over the last couple of days and the interactions have been great but one question kept uh coming up which was circle is a stablecoin company. So why is a stablecoin company at an AI engineering conference?

00:36And well uh the answer to that is fairly simple because circle issues uh USDC which is the world's largest regulated stable coin and we've built over the years expertise in making payments simpler and cheaper and turns out that's one of the bottlenecks for your AI agents.

00:52So when we often think about making AI agents smarter, we think about better models, uh more tool calls, complex orchestration.

Where agents actually stall

01:12But where your agent actually in practice actually halts is when it hits a payw wall or when it has to pay for something. Then you have to step in either create an account, sign up or you know manage API keys. So that's where uh the limitation is and that's the gap that I want to talk about today.

01:35So yeah, I'm Harel and I'm an engineer on the agent product team at circle. So let's sort of take a step back and see how we got here. We believe that the agent economy is already here. So how are uh you know uh we in 2023 we interacted with agents via like prompts

From prompts to workflows to agents that pay

02:01uh your chat GPT and stuff like that. We got a little bit better in 2024 we built workflows. 2025 was all about MCPs, skills, and orchestration. And we believe this year 2026 is when agents actually start paying for services that they want.

02:12And the signals are promising. Just in the last 30 days, uh, agents have transacted with paid API endpoints. Uh, and the volume is about like $24 million over X42. and 99% of it has been settled in USDC. While this number may look small in terms of volume uh in the broader landscape, it's only about to get larger.

02:49So what is X42? Um, essentially X42 is a way where agents can uh pay for their

x402 in one paragraph

02:56the resources that they want because the server essentially returns a 402 header and with the details of how they want the payment to proceed and then the agent just signs um an authorization from the crypto wallet and then pays for the resource and retries the request again.

03:14So that's in X42 in a nutshell and we'll see that in action in a live demo. But then the question is why do traditional payment rails not work and why do the agents get stuck? So the answer is simple uh because for the last 30 years we built the internet around one customer and that was humans right um so we built payment schemes u monetization strategies all catered towards how humans interacted so you had your sign up flows add your credit card uh put in your information and manage your API keys but agents just don't

03:57function that way agents want to they come in and grab that piece of data, resource, compute, inference, whatever, and just, you know, and they have the ability to even like consume knowledge at a scale that humans just cannot. I'm sure like you have seen sessions where it's able to like just scrape through hundreds of web pages and um then it just like stalls because it can't like reach a particular endpoint and it skips over it.

04:21So then you could think oh yeah just give it a credit card or something like that. So while that is possible um these agents uh because they consume so much data as they go it's um they pay in fractional amounts so tiny amounts uh but at a very high frequency uh and credit cards and their fees are just like not sustainable for this kind of like economic model.

04:45um you cannot pay

Why card fees break on a one cent transaction

04:54like 3% uh each time an agent tries to make a 1-centent transaction. And the reason these transaction amounts are so small is because on the sell side or on the merchant side, they've realized that these pay walls were actually catered for humans and now there's an entirely different customer base which is trying to like access their data and they just want like a subset of the data.

05:10So you could monetize that as a seller by just offering that by wrapping that in a uh you know in a pay wall and saying hey I take one pay me 10 cents and grab this data and that's why these are tiny u microtransactions but highly frequent so because the agents are just like making these API calls constantly.

Demo: two agents, one with a wallet

05:41So what do these agents need? The agents need um payments to work like the internet. So they have to be real time, lowcost, programmable, and always on. And that's why we've built the circle agent stack. So it's the full stack platform for the agent economy.

05:57And what we mean by that, let's look at it with a live demo. Um yeah, wish me luck. So, okay. So, I'll just explain uh what I'm trying to if I can get the terminal. Okay. Okay. Let's bullet it. Yeah. I don't know. Excuse me. Can I Yeah, I tried but it's just not I don't know where the placement of the desktop is.

07:00Okay, thank you. So, so what we have over here are two sessions. One is your regular cloud code and on the other on the right hand side is a cloud code that uh comes equipped with circle agent wallet. So it has a wallet which is funded and has the ability to like make uh has the ability to pay for premium content.

07:23And now uh let me actually just uh quickly uh add a task to this. Yep. And run it. So I'll explain what I'm trying to do over here, which is Yeah. So So the task I'm giving uh Claude on and it's the same task on both the terminals is plan my trip for the FIFA World Cup final.

07:47So, uh just you know give me summary of flights um hotels, logistics also like what are the odds of like my favorite team Argentina being in the final who is it going to play and stuff like that. Um and also what's the ticket prices in the secondary market?

08:13How is the experience of other people who've uh actually been to the stadiums? Uh and are there any FYI and stuff like that? grab all of that, send me an email and if possible uh make me make a phone call and tell confirm that all of this has been researched and you know sort of brief me on the summary.

08:26So we'll see like what's happening on on both the terminals here and sorry it's a bit hard to navigate. So as you can see um the left the vanilla cloud code has spun up like a bunch of sub aents and it's going about doing its research. Similarly on the right hand side um it's actually like uh going through the wallets uh and making like um paying for all of these uh premium content and we'll see like what the results of it are.

09:12So as you can see it's um trying to make a phone call to find uh sorry an API call to stable and rich um and it's paying from its wallet. It's set up a guardrail of like hey max amount is 15 cents. The beauty of uh having an agent with a wallet is you sort of build these guardrails uh into the wallet and you

Guardrails in the wallet instead of human approval

09:37don't have to as a human approve every single transaction because that would just not scale because these agents are just making these 1 cent 5 cents 10 cents transactions. You want to like enforce those guard rates which is hey this is the max amount you can send spend per session or this is the max cap you can do per day and stuff like that.

09:56So the agent is still spending within the guarders that you set, but it is autonomous enough to like make these individual API calls. So let me just look at what the vanilla one is looking up and doing some research for hotels. Yeah. Um, lights are coming in also like in the prompt like try to like tell the agent to wrap this whole thing up within 6 to 8 minutes in the interest of time.

10:30So, let's see uh if we're able to like get an email and a phone call done in the same time. Let me also walk you through what the agents doing. If I can grab Yep. As you can see uh the over here the agent was able to like make an API call to uh the poly market data uh via a provider called blockr run and um it provided a query and again set the max amount guard rails and is now passing all the results.

The agent that drafts an email it cannot send

11:53All right. So let's go back to the main sub main agent here. And this is where I think you'll see on the left hand side that the agent gets stuck because the agent just does not have the ability uh it cannot send out an email natively. So what it's doing is it's using my uh it's just like adding a draft into my Gmail account uh that is logged in but it just cannot send it to someone.

12:41Uh whereas the other agent on the right hand side will just be able to use um a provider, pay it and send an email. Now let's see like this one's uh the the other agent is also like uh is about to like send an email and place the call. So let's see does Okay.

13:33So as the I think the left agent the vanilla claw quotes finished and as you can see it's sort of like made a confession that yeah it cannot have it does not have the ability to make a phone call. So it's just like providing me the highlights over here in the terminal itself.

13:49Um and now uh whereas on the right hand side the email's been sent. Now let me try to actually show you the email that we got. I wish grab this somehow. Okay.

The phone call, live on stage

14:19Okay. I'm going to make make the phone call my here and then let's look at the email. So, yep, there we go. So, I got this email. Oh, this is the old one. Let's see the new one. Yep, this is the one that we just received like 2 minutes ago.

15:00And yeah, it has all the details that it was able to like find, including like getting to the stadium, open stadium, and maps. it was able to like you know find all of these and then what to expect by looking at like Reddit tickets etc. So I'll wait for the call but in the interest of time uh it takes sometimes a few minutes for the call to come in uh but let's see uh and I'll move on.

15:37So how does this work uh in the background is yeah let's get back to the slides. Yeah. So so as you can see like uh the agent uh on the right hand side with the wallet was uh able to just make a bunch of these uh API calls and pay for it. While blockchains make all of these things theoretically possible, there are there are also some bottlenecks because uh even the most efficient blockchains

Why gas fees and shared block space bite

16:16um have a gas fee and these small transactions just don't scale because the gas fee will again be a significant um sort of fraction of the actual transaction. But it is important uh to have gas fees because they prevent the network from spam and abuse.

16:31Um and blockchains also have some throughput limitations because there are other use cases um that run on blockchains and block spaces shared infrastructure. So the problem for agents is unpredictable latency and degraded performance under load.

16:46So what we did for that uh is essentially u we built a new u infrastructure layer on top of our interop product called gateway. So it's called nanop payments. It's built for subs and transaction sizes for as low as 1 microcent. Uh it supports um it is gas free for the seller and it's instantly crosschain.

Nanopayments, and settlement in milliseconds

17:12And the way it works is you essenti um your wallet and then depos. Oh, sorry. While I explain this, let's listen to the actual call that came in. And hi Harshel, here is your World Cup final trip for July 19 at Metife Stadium. Fly SFO to either EWR or JFK non-stop.

17:30SFO is showing live arrival delays today, so build buffer. Can you tell me how do I get to the uh stadium from my hotel? On match day, take NJ Transit to Sakus Junction, then the Meadowlands Rail Spur direct to the stadium budget about an hour to seat.

17:53Thank you. Uh I'll read the rest of it in my email. Thank you. You're welcome. All right. So, that was just a quick demo of like how you can have like AI agents um if they're equipped with a wallet, they can do a lot of things um with as opposed to an agent that does not have a wallet.

18:10So, um I have a couple of more minutes. So, I'll just walk you through how this technology works underneath. Uh so if you have a wallet and you've funded it uh with USDC, it's very easy because Circle works with a bunch of providers to on ramp your actual US dollars into USDC and from there you can deposit the funds into a smart contract.

18:32The next thing uh it does is the agent just has to like sign these off-chain authorizations uh which are essentially cryptographic signatures saying I am paying this address this particular amount of money and then the server just has to like relay this to circle and within a few hundred milliseconds uh this the server knows um the merchant knows that you know the user has the funds and is able to release the action.

19:04actual resource that the agent requested and with this you avoid the issue of like you know uh latencies and stuff that are associated with actually settling every single transaction on chain and this uh the agents are able to like pay for things um at the speed at which they operate.

19:26So in conclusion, the the the way the stack would work is you have circle agent wallets which give you the ability to equip your agents with wallets. The agents have can now hold their money, spend that money autonomously, but within the guardrails that you set.

19:43the wallets enforce those guardrails and then on the sell side the merchants are able to like just wrap their endpoints and resources and monetize it with a few lines of code using our SDKs. Then USDC and nanop payments is the layer underneath it which sort of helps settle these transactions at the speed at which agents operate which is subsecond.

20:03So uh and that this is how it scales. Uh and you can give it a try yourself by um going to agents. It's just a couple of clicks and um you will have your agent equipped with a wallet and ready to like you know make these phone calls and things like that.

20:31So yeah, thank you