Elon Musk said late Tuesday that the payment features on the social application X will go live next month.
The feature called X Money turns X into a fintech app with peer-to-peer transfers, bank deposits, a debit card, cashback
The platform is licensed in over 40 US states through subsidiary X Payments and has Visa as an account funding partner.
Dogecoin rose as much as 8% before reversing gains following the announcement despite containing zero references to crypto. It hit nearly $0.10 over the last 24 hours before settling around $0.093, making it the best performing major crypto over both 24-hour and seven-day periods.
The reflexive move reflects a pattern that has played out several times since 2021. Musk says something about X payments, and DOGE speculates that he will integrate it.
Musk has called dogecoin his “favorite cryptocurrency” and Tesla accepted DOGE for merchandise in 2022. But X Money is, as described, a pure fiat product with peer-to-peer transfers, banking, debit cards. It’s closer to Venmo with a social media app attached, not a crypto wallet.
As such, X’s product manager Nikita Bier said in February that crypto trading tools would come to X through Smart Cashtags, but clarified that the platform would not execute trades or act as a brokerage.
It would provide data and links that redirect users to exchanges. Musk recently reposted a third-party forecast for X Money’s future features that included “crypto integration,” but the company has not confirmed anything.
The more interesting question for crypto markets is not whether DOGE will be added. That’s a 6% dividend.
Six percent on a balance on a social media app used by hundreds of millions of people is higher than virtually all U.S. savings accounts and rivals money market funds. Whether it is subsidized by X to drive adoption, generated by lending deposits or supported by some other mechanism matters enormously to how regulators view it.
The timing clashes with Congress’ battle over the CLARITY Act, which would set rules for yield-bearing stablecoin products.
The Senate Banking Committee is targeting mid-to-late March for the markup. The central policy question is whether non-bank platforms should be allowed to offer deposit-like returns to consumers.
X Money is not a stablecoin product, but it targets the exact same consumer demand, people looking for better returns than their bank offers, through a different regulatory route.
If X Money launches at scale with 6% APY before the CLARITY Act is passed, it makes for an awkward comparison. A fiat fintech product in a social media app is going to offer dividends that cryptostablecoin products are legislated out of.
