X's crypto business has received its first license, and Musk may bring new variables to the crypto world

Written by: veDAO Research Institute

According to data from the Nationwide Multistate Licensing System (NMLS) website*, X (formerly Twitter) subsidiary Twitter Payments LLC obtained a currency transmitter license in the state of Rhode Island on August 28. This marks a key step in Elon Musk's plan to transform X into "The Everything App" with multiple functionalities. In this article, veDAO will analyze the significance of this news and its potential impact on X and the cryptocurrency industry.

Significance of the Currency Transmitter License

The "currency transmitter" license granted to X by Rhode Island regulators involves the transfer and receipt of financial funds, applicable to both fiat currencies (such as USD, EUR) and cryptocurrencies (such as Bitcoin, Ethereum).

One of the steps to becoming a payment hub or cryptocurrency payment service provider in the U.S. is obtaining the necessary licenses to operate legally. X has been gradually doing this in various states (including Arizona, Missouri, Georgia, Maryland, Michigan, New Hampshire, and now Rhode Island), primarily focusing on statutory payments under the "money transfer license." However, the "currency transmitter" license will now allow X to become a provider of cryptocurrency-related services, such as cryptocurrency exchanges, wallets, and payment applications. Specifically, this license will enable X to store, host, and exchange digital currencies on behalf of its millions of users.

The acquisition of the currency transmitter license is significant for X itself and the entire cryptocurrency industry. It represents a move towards compliant operations for X's cryptocurrency business, helping to enhance trust among users and regulators. Of course, X still needs to establish robust anti-money laundering and risk control mechanisms to protect users' digital assets. At the same time, X's involvement is expected to increase the awareness and recognition of cryptocurrencies among the Web2 community, contributing to broader acceptance and attention for the crypto world. This news also confirms that X will delve deeper into the cryptocurrency space, potentially collaborating with more Web3 projects to co-build the crypto ecosystem and create more application scenarios; this will also promote the development of the cryptocurrency industry.

Since Elon Musk has been a well-known supporter of the cryptocurrency community, he may further drive the development of cryptocurrency technology and markets through the X platform. Elon Musk has stated that X will be friendly towards cryptocurrencies, especially Dogecoin, and may integrate Dogecoin into the X payment system in the future. The former Twitter assembled a dedicated team to advance the "Twitter Crypto" project, responsible for cryptocurrency payments and infrastructure development. X has also collaborated with cryptocurrency companies on crypto feature development, such as partnering with Strike for Bitcoin tipping functionality and with eToro to allow users to trade cryptocurrencies, stocks, and other financial assets.

Finally, the news of Twitter Payments LLC obtaining these licenses has given meme coin enthusiasts a boost: this news had a subtle impact on Shiba Inu-themed meme coins, with Dogecoin rising by 6% from the 28th to the 29th, according to Coinmarketcap data.

What Crypto Applications Might X Launch?

While X is working to obtain compliance qualifications and build cryptocurrency business capabilities, Elon Musk has also made it clear that X will not issue its own token. However, aside from issuing its own token, what cryptocurrency-related applications might X launch?

Support for Mainstream Cryptocurrencies

X could directly support mainstream cryptocurrencies like BTC and ETH for platform payment services and rewarding creators. This could also become a channel for cryptocurrency adoption and may serve as an important gateway for Web2 users to enter Web3.

Integration of Cryptocurrency Wallets

X may consider integrating with third-party cryptocurrency wallets in the future, allowing users to manage their crypto assets directly through X and facilitate asset transfers between different wallets.

Decentralized Trading

Connecting with DEXs to allow users to trade crypto assets directly on X.

Launch Unique NFTs

If X decides to promote NFTs, there could be three potential approaches: launching NFT features to establish a creator economy, protecting creators through NFTs and enabling direct purchases of their works; creating an NFT trading marketplace; or X might launch its own NFTs, building a unique digital asset economy on the platform while incorporating smart contracts for permission control.

Web3 Social Applications

Integrating SocialFi features to connect decentralized social applications. Users could link external wallets to manage their digital identities and virtual assets across platforms. X may also connect blockchain identity systems to support decentralized social applications, enabling user identities and credentials to be controllable and portable.

Fully Entering Web3? Further Observation Needed on X's Subsequent Deployments

X's acquisition of the currency transmitter license in Rhode Island is just the first step in building its cryptocurrency payment capabilities. This opens a door for X in the cryptocurrency field, but its specific applications and scale still need further observation.

X still needs to obtain licenses from more states to fully conduct compliant cryptocurrency business. Additionally, X has not yet applied for the critical BitLicense established by the New York State Department of Financial Services (NYSDFS) or the EMI license in Europe. These will be key indicators of the scale of X's cryptocurrency business.

Before launching actual cryptocurrency applications, X needs to conduct comprehensive risk assessments and community testing to ensure a smooth transition for the overall business; as well as collaborate with authoritative security and compliance organizations in the industry to ensure the platform's information and asset security.

Most importantly, regulatory policies and user acceptance will significantly impact the effectiveness of X's cryptocurrency business, so X is likely to adopt a gradual and cautious strategy rather than a full-scale launch of cryptocurrency-related features.

Conclusion

In summary, this license approval has legally opened the door for X to advance its cryptocurrency business. This is both a new beginning and the start of a long-term effort. Before implementing actual cryptocurrency applications, X still has much preparation and regulatory coordination to do. We have reason to remain optimistic and expectant about X becoming an important player in the cryptocurrency ecosystem.

Source: https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/2404946