The social media site X, owned by Elon Musk and formerly known as Twitter, has just been granted payments licenses by a number of American states, including a currency transmitter license in Rhode Island earlier this week.The licenses allow for broader payment services to be provided, even though Musk has hinted at accepting cryptocurrencies on the network, briefly replacing Twitter’s bird emblem with dogecoin’s dog before its rebranding to X last month.
The money transmitter licenses obtained since June from Arizona, Maryland, Georgia, Michigan, Missouri, and New Hampshire indicate the tech billionaire may have plans to support nationwide payment processing similar to Venmo or PayPal, a company he co-founded. Musk has stated that he plans for X to expand beyond social media posts and become a “everything app.”While required for approving payments, the Rhode Island license is also necessary for providing crypto services.
“I think a new social media company is needed that is based on a blockchain and includes payments,” Musk said in a text message just days before the bombshell offer to buy Twitter for $43 billion back in April 2022.
The Department of Business Regulation (DBR) of Rhode Island states in a frequently asked questions document that businesses needing clearance “include those transmitting money for its customers, including traditional wire transfers (like Western Union) and electronic transfers (like PayPal).”
The state’s currency transmission license is also necessary for operating a cryptocurrency exchange and custody service, but fintechs are exempt in “very rare cases” where the company “is registered as a true ‘agent’ of the Rhode Island licensed currency transmitter… and money transmission is not the core profit-making business of the fintech.”
Although they undoubtedly pave the way for accepting cryptocurrency payments, state permits are not exclusive nor exclusive to that business.“Money transmission” in New Hampshire refers to the activity of buying, selling, or issuing stored value, as well as obtaining cash or money for the purpose of sending it to another area.” The state also says “an administrator or exchanger that accepts and transmits a convertible virtual currency or buys or sells convertible virtual currency for any reason is a money transmitter under federal regulations …”
The same state licenses as X are held by Western Union and PayPal, in addition to other licenses related to the services they provide and the states they operate in.