Elon Musk denies crypto token plans for X platform

Elon Musk – Elon Musk Colorado 2022 (cropped 2) – CC BY-SA

Elon Musk has dismissed rumors that he would launch a native cryptocurrency token for his newly rebranded social media platform. The former CEO of Twitter, now called X, clarified the matter in response to a user’s post on the platform.

The catalyst for this statement was a tweet from a user @DogeDesigner, who had previously interacted with both Musk and Linda Yaccarino, the platform’s current CEO.

This user cautioned against believing “scam” headlines that wrongly asserted the launch of crypto tokens by Musk or his X platform. Musk responded that he “never will” launch such a project.

Despite the dismissal, many are still hopeful that Musk will add crypto functionalities within the X app, given his history with digital assets.

Musk’s affinity for Dogecoin (DOGE), a token initially created as a joke to the crypto community, is widely known. The billionaire’s acquisition of Twitter for $44 billion last year was accompanied by his prompt replacement of the platform’s iconic blue-bird logo with the Shiba Inu dog image synonymous with Dogecoin for a brief moment.

This move led to a 20 percent surge in the token’s value and invited a substantial $258 billion lawsuit against Musk, alleging insider trading and racketeering.

History of X

In the late 1990s, during the initial dot-com bubble, Musk co-founded one of the earliest online banks, X.com. This endeavor came on the heels of his previous venture, Zip2 — a directory of local businesses — which Compaq acquired for over $300 million, elevating Musk to multimillionaire status.

The bulk of his earnings from the Zip2 sale, approximately $12 million, was invested into X.com.

The original X.com merged with its competitor Confinity in 2000 and rebranded as PayPal the following year. After eBay acquired PayPal for $1.5 billion in 2002, Musk reaped the benefits with a substantial windfall of around $180 million. This windfall became instrumental in his investments in Tesla, the electric vehicle startup, and SpaceX, his rocket company.

Musk has consistently held that X.com had the potential to serve as the ultimate transaction hub, where all sorts of transactions could seamlessly take place. He even pondered the possibility of reacquiring PayPal, underscoring the significance he placed on the platform’s potential.

Musk’s ambitions to transform Twitter into a payment-focused “super-app” seem to eclipse even the aggressive growth strategies of PayPal.

Earlier this year, Musk outlined a blueprint for X that revolved around enabling peer-to-peer payments akin to PayPal while also transitioning toward a subscription-based model, reducing reliance on advertisements. According to Musk’s projections, over 100 million users will subscribe to X by 2028.

Despite Musk’s target of generating around $1.3 billion in payments revenue from Twitter by 2028, experts raised concerns about its ability to effectively compete in the US market, which is already dominated by powerful rivals like Venmo, Cash App and Zelle.

Additionally, moving into the payments sector is expected to attract considerable regulatory scrutiny, further heightened by Musk’s controversial decision to lay off more than half of the platform’s staff, raising questions about its compliance capabilities.