While Elon Musk grinds on stage with a government spending chainsaw in one hand and a Tesla fire extinguisher in the other, his X CEO Linda Yaccarino is quietly project managing Musk’s lifelong dream, and the next logical step in X’s evolution from Twitter to super app.
In January, Yaccarino announced that X Money, featuring crypto archetypes like digital wallets and peer-to-peer payments, was scheduled for launch “later this year.”
A dedicated X Money profile page has since reiterated establishment player Visa as X Money’s “first” partner.
Visa will not be the last.
Given Musk’s talent for imploding the reigning order and remaking it in his techno-centric image, the idea that X Money begins and ends with an established (expensive, latent and fee-heavy) payment brand such as Visa is highly unlikely.
Crypto will be a part of the equation. Sooner rather than later.
Here is the case for X Money as crypto’s killer Web3 application.
Friends in High Places
Crypto and X Money has an air of inevitability given the players involved. Both Elon Musk and his fellow entrepreneurs in the money revolution now find themselves with key positions in a crypto-friendly Trump administration. Musk leads the Department of Government Efficiency (DOGE). While David Sacks heads up crypto and AI policy.
Both men have a working relationship dating back to the 90s, when Musk founded the very first iteration of X.com, an online payment company that later merged to become PayPal. Sacks of course served asPayPal’s Chief Operating Officer.
Musk’s space and crypto interests also mirror those of Jed McCaleb, co-founder of payment blockchains Ripple and Stellar. McCaleb’s company, Vast, is developing the Haven-1 commercial space station, and collaborates with Musk’s SpaceX and Starlink for logistics and connectivity.
Correlation is, of course, not causation. But these patterns give cause to rationally speculate that Musk now has the vastly superior access, contacts, technology and regulatory tailwinds to execute the X.com payment vision he had back in 1999.
Which Crypto for What?
Not speculative is the fact that crypto will be needed to most effectively deliver what we know of X Money so far: that it will be a global, fast, financial ecosystem, with digital wallets and peer-to-peer transactions.
Visa is not a true peer-to-peer network. It functions through a range of bank intermediaries to process and settle money. That settlement is not instant. And the fees involved would make micro-transactions and tipping a waste of time.
And so the questions on everybody’s lips become, which crypto? And what will it do?
Elon Musk has made (often joking) endorsements of Dogecoin. And he has rumoured financial stakes in Bitcoin and Ethereum. However, a business decision, rather than a personal one, means he is likely to rely on a confluence of blockchains and their associated cryptos to power X Money. Here’s how they could interoperate:
- Dogecoin’s established cultural presence may be leveraged as a public-facing memetic, used to drive interest and social contagion.
- Ethereum’s smart contracts could code in revenue streams for creator content at the most micro level e.g., for posts, pictures, tips.
- Ripple’s XRP and Stellar’s XLM could instantly settle transactions on the back end rails, and deliver money to X users from Dublin to Djibouti, no bank required.
The value and demand for any coins involved would exceed most investors’ wildest expectations. But more important are the societal features that a crypto-powered X Money could deliver. Imagine:
- A creative, artisanal entrepreneur in Zambia, listing their goods directly on X and receiving instant crypto-powered payments in stablecoins; bypassing the macroeconomic disruptions and financial distress that may have impacted their individual business’s ability to borrow, grow, and transact in an emerging economy.
- A writer or designer (or other member of the cash-strapped creative economies) could deconstruct their work from pay-per-article to payment per post or image. So that every time a sentence, post or picture they create goes viral, they are paid royalties in perpetuity. All based on clear, smart contract rules that define them, not a centralised publisher, as the main owner and beneficiary of the Intellectual Property.
- General X users could be paid for their attention on specific articles and content, as AI and automation nudges people’s economic value proposition away from their labour and production, towards where they place their attention.
Will social banking really beat central banking?
But trust really is the key word required to activate all this.
And the brutal reality is that right now, crypto – and for many, Elon Musk himself – simply do not engender that required level of trust. Regulatory clarity and consumer protections are pre-requisites for X Money. The stablecoin and Market Structure bills currently moving through Congress will go a ways to addressing this. There must also be a calming of the culture wars. Less sensationalism and more tangible, lived results to the taxpayer from DOGE efforts.
The sheer disruption of X Money must also be accounted for. Democratising money in this way will make Tesla’s arson and chainsaw austerity look like child’s play by comparison. Flames and blades are not known to be favoured by the banking establishment. One need only look to Facebook’s 2019 attempt to roll out Libra; a global digital currency, stabilised to a basket of fiat currencies, rolling out low-cost, speedy transactions for the unbanked over blockchain rails.
Regulators, central banks and financial institutions had a collective conniption fit. Money laundering, fraud, and a host of viable concerns were put forwards, beneath them lurking perhaps the main concern: the big players’ monopoly on money.
On that occasion they were able to catch and kill the nascent product. Though they may not this time. Regulatory resistance is melting like ice under a flame. President Trump has crypto and blockchain on a trajectory that makes resistance to either look futile. And at times, it actually even looks like central banks may be asked to share the decentralised wealth and compete in a private marketplace for money issuance, flow, and control.
It sounds insane. But prior to 1913 US Federal Reserve Act, things worked exactly this way; a network of independent and private financial institutions. All issuing their own notes, with the value of those notes based on the bank’s reputation, reserves, and ability to provide monetary stability and – that word again – trust.
Based on these performance metrics, it’s interesting to ask: Would the Federal Reserve and its fellow lockstep central banks shine on that scorecard? Consumers are best placed to answer and decide. As they will ultimately decide the fate of X Money. And if the shared values of social trust, social proof, and social contagion can all align, it’s likely that X Money will be crypto’s killer Web3 application.
