Elon Musk's Venture Secures Multi-State Licenses for Payment Processing, Including Cryptocurrency
Elon Musk's social media platform, known as X (formerly Twitter), has successfully secured licenses for money and currency transmission across seven U.S. states, with a recent addition being approval from Rhode Island. This newly acquired Rhode Island license not only covers the processing of cryptocurrency payments but also extends to encompass broader payment service providers like PayPal and Venmo.
Under the ownership of Musk, the platform has been actively pursuing licenses related to payment operations from various states in recent months. These licenses, including the recent authorization for currency transmission in Rhode Island, provide capabilities beyond just facilitating cryptocurrency transactions.
Musk's vision for X surpasses its role as a mere social media platform, as he plans to transform it into a comprehensive application offering diverse services. The sequence of money transmitter licenses obtained since June from states like Arizona, Maryland, Georgia, Michigan, Missouri, and New Hampshire indicates that Musk might be setting the groundwork for a nationwide payment processing infrastructure similar to the likes of Venmo or PayPal—both of which Musk was involved in co-founding. The newly obtained Rhode Island license, while crucial for enabling payment operations, also positions the venture to deliver cryptocurrency-related services.
Musk's statement, "I think a new social media company is needed that is based on a blockchain and includes payments," made shortly before his significant offer to acquire Twitter for $43 billion in April 2022, sheds light on his strategic vision. Rhode Island's Department of Business Regulation (DBR) clarifies that these licenses encompass firms engaged in transmitting money for customers, encompassing traditional wire transfers like Western Union and electronic transfers like PayPal.
Additionally, the currency transmission license of the state plays a pivotal role in conducting cryptocurrency exchange and custody activities. An exception is provided for fintech firms registered as legitimate "agents" of licensed currency transmitters in Rhode Island, where money transmission isn't their primary profit-generating activity.
While these licenses undoubtedly facilitate cryptocurrency payment services, their scope extends beyond this realm. For instance, in New Hampshire, "money transmission" entails engaging in the business of selling or issuing payment instruments, handling stored value, or receiving currency for transmission to different locations. Furthermore, the state categorizes administrators or exchangers dealing with convertible virtual currency as money transmitters under federal regulations. Similarly, Western Union and PayPal hold these state licenses, tailored to their specific services and operational jurisdictions.