Elon Musk scoops up licenses for crypto payments — but experts say don’t hold your breath

Elon Musk has vowed to turn X, formerly Twitter, into an “everything app,” and crypto payments may be a key piece of his plan.

Some speculate that Musk is keen on parlaying his love of digital tokens into a new business at the social media platform he acquired and took private in 2022 for $44 billion. In any case, the company has been scooping up the necessary permits from US states.

Rumours are “flying around” that X is collecting licences to enable crypto payments, Jett Tang, president of crypto incubator Hourglass Collective, told DL News.

“If this actually happens, there is a lot of anticipation as to how it will be executed,” he said.

Twitter’s payments unit secured a money transmitter licence from Maryland on August 16.

On Monday, Twitter’s payments unit obtained a Rhode Island Currency Transmitter licence, according to a public listing on the Nationwide Multistate Licensing System Consumer Access.

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These are not crypto exclusive licences. The latest licence allows firms to make traditional and electronic wire transfers for customers, but also regulates crypto transfers and wallet services.

But don’t hold your breath waiting on an X crypto payment solution — these are only the early steps in a long journey for X.

The listing shows similar licences from seven US states for Twitter Payments LLC issued over the course of 2023. Payments are a heavily regulated space, and with new bills and lawsuits piling onto crypto, there may be a long way to go.

Securing licences may indicate “a potential roll-out for certain US users,” said Louis Bellet, CEO of Yellow Network, a decentralised clearing protocol.

“However, for global implementation, Musk would have to navigate numerous legal pitfalls, similar to those encountered by companies like Binance,” he told DL News.

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Binance, the world’s biggest crypto exchange, has been hit by a Securities and Exchange Commission lawsuit in the US, and several legal setbacks in Europe over the summer.

Europe would be a particularly big challenge, because of its heavy-hitting policies on privacy, payments services, and inhibiting digital markets players from abusing their power.

“Musk may find the regulatory complexities and costs outweigh the potential profits from services like Twitter Blue and Creator Ads,” Bellet said.

Even if Musk is able to transform X into a crypto-buzzing everything platform, its payments facility would also be up against big competition. PayPal — which Musk helped found — recently launched its own stablecoin and has offered its users to buy and sell cryptocurrencies since 2020.

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Yet Musk is reportedly squaring shoulders with the global digital payments giant. Leaked information suggests that X is working on an “updated version of PayPal,” according to a post from Fox Business news journalist Charles Gasparino.

Musk has long been vocal in his support in crypto, and Dogecoin is a Musk favourite. The two are closely connected, as the tokens’ price often links with Musk’s moves. The X chief even changed the Twitter logo into the Doge meme in April.

But Bellet does not expect to see Doge as the X payments go-to. Paypal’s recent stablecoin launch is testament to the growing role of stablecoins in the future of payments.

“Speculative tokens such as Dogecoin are absolutely in no way suitable for processing payments due to their high volatility,” he said. “Instead, stablecoins are a more likely candidate for initial acceptance.”

Do you have a tip about crypto payments on X? Contact Inbar Preiss, our Regulation Correspondent, via email at inbar@dlnews.com.