X marks its spot for payments, banking

Elon Musk wants to position X (the social media platform once known as Twitter) at the center of Americans' financial lives. Musk, who co-founded PayPal—which was purchased by eBay and eventually spun off into an independent company—isn't interested in building another payments platform. He wants X to become an "everything app," and that includes being a vehicle for all manner of financial transactions.

"When I say payments, I actually mean someone's entire financial life," Musk said in an October staff call, a transcript of which was published in the online the publication Tech Crunch. "If it involves money, it'll be on our platform – money or securities or whatever. ... I think payments and just generally being a financial hub is going to surprise people [with] just how powerful it is."

The timeline: "It would blow my mind if we didn't have that rolled out by the end of next year," he told staffers.

That may be because Musk has been thinking about payments and financial services for years. "I really understand this world," Musk said. In fact, the product road map he and associates created back in 2000 was much more comprehensive than payments alone. He faulted eBay for not following through on that vision. "PayPal is a less complete product than when we came up with it in July of 2000," Musk claimed.

Money transmitter licenses in 12 states

In the 14 months since Musk took over Twitter and renamed it X, the company has secured money/currency transmitter licenses in a dozen states. The latest of these are South Dakota, Kansas and Wyoming, each of which issued a charter to X in November 2023. The other nine states that have been granted X money transmitter licenses are Arizona, Georgia, Iowa, Maryland, Michigan, Mississippi, Missouri, New Hampshire and Rhode Island.

Musk has hinted at using the X platform to support crypto. He even briefly swapped out the Twitter bird logo for the dogecoin dog logo before rebranding it X. But the only mention of crypto during his meeting with employees was in reference to X's work to combat spam and scams.

Money transmission is an age-old practice that began in the 19th century with individuals and companies sending money across the country via telegraph networks. Today, it is a complex world of electronic networks on a global scale. Some of the most prominent firms include Western Union and MoneyGram.

These companies are commonly used to pay bills; send and receive money between family and friends, domestically and internationally; and to make online purchases. They are regulated at the state level, although several bills have been introduced in Congress to create a national framework for money transmitter licenses.

The Office of the Comptroller of the Currency, which has regulatory authority over some of the largest banks, created a new category of "special purpose" charters. Some observers have suggested this could become a vehicle for federal money transmitter licenses.

While the "special purpose" charter is primarily intended for financial technology companies that want to offer traditional banking services, a 2020 report from the Congressional Research Service noted that several fintechs already have state-issued money transmitter licenses. The report added that many of these money transmitter businesses facilitate virtual currency exchanges.

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