X, which was once Twitter, has successfully acquired money-transmitting licenses in seven states within the US.This license permits the platform to operate as a money service business (MSB), enabling it to handle international transactions.This move might be a step in Elon Musk’s vision of transforming X into a multifunctional application.
On October 4, 2022, Elon Musk expressed his intentions by stating, “Purchasing Twitter is a step towards developing X, the all-in-one app.” After nine months, this vision became more evident when he rebranded Twitter as X. Introducing financial transactions is the initial stage in Musk’s plan to evolve X into this multifunctional app.
As per the Nationwide Mortgage Licensing System (NMLS) — an organization overseeing US mortgage lending, X has been granted a money transmitting license in seven American states. Rhode Island was the most recent state to grant this license, which did so on August 28, 2023.
Understanding the Money Transmitting License
In Rhode Island, entities needing a money transmitting license are those involved in “transferring funds on behalf of its clients, which includes both conventional wire transfers (akin to Western Union) and digital transfers (similar to PayPal).”
This license positions X as an MSB, putting it in the same category as Stripe, a US-based fintech firm that manages international payments. Entities holding this license serve as a bridge for individuals or businesses aiming to transfer funds internationally.
X’s Potential Use of the License
While X hasn’t explicitly mentioned its plans for the license, it now can facilitate money transfers in the seven states where it has been licensed. These states include Arizona, Georgia, Maryland, Michigan, Missouri, New Hampshire, and Rhode Island.
Additionally, X has the potential to venture into the crypto business. The license in Rhode Island encompasses the “management of virtual currency transactions on behalf of others.” This means X could function as a crypto exchange or a platform for crypto payments.
Elon Musk has consistently shown his enthusiasm for cryptocurrencies on X. In 2021, his influence was evident when his tweets significantly impacted crypto market values. For instance, his tweet about SpaceX placing an actual Dogecoin on the moon led to a 30% surge in Dogecoin’s value. Furthermore, reports suggest that his electric vehicle company, Tesla, holds 9,720 bitcoins and a certain amount of Dogecoins.
With X now licensed to operate both as a crypto exchange and an MSB, it’s anticipated that financial features will soon be integrated into the platform. However, it remains to be seen if this will give X a competitive advantage.