Mizuho Securities issued a warning Thursday about Elon Musk's upcoming "X Money" payment service, set to launch on X (formerly Twitter) in April. Analysts Dan Dolev and Andrew Jenkins say the service targets the core of the U.S. payment system — peer-to-peer transfers and digital wallet entry points — with PayPal and Venmo being the most direct substitutes.
WeChat Pay-like app? Hundreds of millions of MAUs + Musk's background form disruptive base
X Money is designed as the financial infrastructure layer of the "Everything App." According to the Mizuho report, X aims to merge messaging, banking yields, and commerce, akin to WeChat Pay or Alipay in Asia. With a global monthly active user base of 500 to 600 million and Musk's deep payment expertise as a PayPal co-founder, the analysts believe X Money has the perfect conditions to disrupt the market. Mizuho downgraded PayPal stock to "Neutral" and warned that PayPal and Venmo "face the most direct substitution risk because X targets the same P2P and wallet entry points."
X has already rolled out "Cashtags" this week, letting users view stock and crypto financial data directly in their timelines.
Crypto payment roadblock: New York's CRYPTO Act raises licensing bar
The analysts are not optimistic about X Money's crypto ambitions. New York State's proposed CRYPTO Act (Cryptocurrency Regulation Yields Protections, Trust, and Oversight Act) would criminalize unlicensed virtual currency business activities in the state. "The proposed legislation raises the risk and bar for X's potential eventual crypto integration," they note. If X Money wants to incorporate crypto payments, it will face a long and strict licensing battle.
6% APY on thin ice? Clarity Act could prevent non-bank yield offerings
Another flagship feature of X Money — offering up to 6% annual percentage yield (APY) on user cash balances — may also hit a federal regulatory wall. The Mizuho report points to the Clarity Act, a broad digital asset regulatory framework under debate at the federal level. A key controversy is whether non-bank platforms should be allowed to provide yields or rewards on crypto assets (mainly stablecoins). The analysts say X Money's timing for the 6% APY is "particularly sensitive" given that the Clarity Act could ultimately limit non-bank platforms' ability to offer such returns. If rule tightened, the strongest hook to attract user funds may face major compliance challenges.
With both explosive potential and dual regulatory minefields, the payments industry and crypto players are watching closely for April's launch — to see how much old territory it can capture and whether it can navigate the regulators.