Musk has previously said that X has the potential to encompass “half of the global financial system” if successful.
Since acquiring the platform in October 2022, Elon Musk has changed Twitter from the inside out. The iconic little blue bird has retired, making way for the imposing ‘X’ that now defines the platform. This shift marks just the beginning of what will eventually become an “everything app.”
Musk is a self-declared free speech absolutist, and his vision with X is clear: to transform it into a genuine digital town square; uncensored and fully equipped with its own monetary system.
On August 28, X acquired a Rhode Island Currency Transmitter License, NMLS data shows.
The license is a big win for the platform, as it enables X to legally engage in money transmission activities within the state of Rhode Island. This means the platform can facilitate the transfer of money and monetary value, including cryptocurrencies like Bitcoin or Dogecoin, between its users.
CryptoPlug has reported on several occasions that one of the key currencies on X is likely to be Dogecoin – Musk’s ‘”fav” crypto, though this is speculative. In May 2021, Musk tweeted that he has been “working with Doge devs” to improve the efficiency of the Doge transaction system. Later, when a Dogecoin UI/UX designer tweeted Musk implying the theory of ‘X’ with Dogecoin emojis, Musk replied with a simple ‘yup’.
Tesla, Musk’s automotive and intelligence company, only accepts Dogecoin as cryptocurrency. Although the company announced it would start accepting Bitcoin as payment for its cars in 2021, it eventually backtracked.
More recently, after the official X name change, the Dogecoin ‘D’ appeared in Musk’s bio, where it remains.
Since news broke of the license, Dogecoin has increased by 4.49%, with its market cap sitting at $9.1 billion. This increment is admittedly smaller than expected and is in line with wider market movements.
Bitcoin for instance pumped 7% yesterday, following Grayscale’s SEC victory.
What are the wider implications of the license?
Integrating crypto payments on X comes with a range of possibilities, from content monetisation (which already supports Bitcoin), fundraising, and standard peer-peer transactions.
A key benefit to the license is that it will bring a sense of integrity market, because it demands close compliance. This might involve background checks, financial audits, security measures, anti-money laundering (AML) and know-your-customer (KYC) procedures, and more.
Currency transmitter licenses are also designed to protect users from fraud. Speaking on an episode of Real Talk with Zuby in June, Musk confirmed that the X transaction will have “the least amount of fraud” because “everything [will be] in real time”.
Last November, X also registered with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), further paving the way toward a secure payment processing platform.
While the license is currently only issued by Rhode Island, obtaining a license often facilitates expansion into other states, as some states have reciprocity agreements. Time will tell, but one thing that’s clear is that US regulators are unlikely to give Musk an easy time.
Since the collapse of FTX, US regulators have clamped down hard on the crypto industry, filing lawsuit after lawsuit against major players like Binance and Coinbase. Brian Armstrong, CEO of Coinbase, once threatened to leave the US all together, and companies like Tether have shifted their focused toward private offshore banking partners.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.