When Elon Musk took the helm of Twitter last October, I wrote that his real motivation for doing so was not to promote free speech or combat bots or whatever he was saying at the time. Instead, I pointed to the team he had assembled and to his early startup days to say that, for Musk, Twitter offered a vehicle to realize his longtime dream of wresting the business of payments from the banks.
On Tuesday, additional support for the Musk-wants-Twitter-for-payments theory came along: My colleague Kylie Robison published a scoop that X, as it is now known, is preparing to charge users $1 a year to use basic features like tweeting (sorry, “posting” in Musk speak). The CEO’s official explanation is that it’s part of his long-standing plan to reduce bots, which ironically have become far worse under his tenure.
Few tech and media watchers bought the explanation, pointing out that paying $1 won’t deter those running bot-based spam networks and that many of these bad actors will just use stolen credit cards. Meanwhile, many also pointed to what is likely Musk’s true motivation: obtaining users’ financial information. The prospect of this did not go over well. As one user wrote, “The idea of paying $1 to tweet is bad enough, but giving any of my bank details to this guy? I’d rather mail a dollar bill.”
I asked Kylie—who has become the go-to reporter for all things Twitter/X—what she thought, and she agreed this is “certainly a grab for people’s credit card info to make payments happen.” But she also pointed out that the $1 requirement is only being rolled out for now in New Zealand and the Philippines—hardly major markets—and that could be the extent of it, but “it always, always depends on Elon’s mood.”
I certainly agree with that. It’s also worth noting that Musk has made a spectacular career doing what others said couldn’t be done. His sale of nearly 2 million Teslas debunked the myth that electric vehicles would never catch on and, with SpaceX, he broke the defense industry’s monopoly on rockets. That’s why it would be foolish to count him out when it comes to disrupting the payment industry—perhaps using Dogecoin, which is another of his hobbyhorses.
That said, I see two major obstacles to turning X into a payments platform. The first is that people go to the site to consume media and aren’t looking to purchase things. Facebook and Google have made many attempts over the years to turn their platforms into shopping venues but failed because that’s not what their users are there to do. The second challenge to Musk’s vision is that X is turning into an ever-bigger dumpster fire by the day—the proliferation of grifter accounts spawning fake OSINT (“open-source intelligence”) about the Hamas-Israel conflict is just the latest example. If this continues, there might come a day when there’s no one left on X to pay for anything.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
The ECB moved further toward launching a digital euro while assuaging concerns about deposit flights by saying users will be able to own a max of 3,000 euros. (Reuters)
The popularity of Lido, the decentralized Ethereum staking service, has cooled off amid technical hiccups and concern it risks gaining too much control over the blockchain. (CoinDesk)
In the latest senior departure at Binance, the exchange’s managing director for France stepped down. (Bloomberg)
FBI phone data confirms Sam Bankman-Fried met with a host of powerful people in NYC, including Bill Clinton and New York’s governor, weeks before FTX collapsed. (Fortune)
A respected forensic firm published an analysis showing recent news reports have overstated the role of crypto in terrorist finance. (Chainalysis)
MEME O’ THE MOMENT
The financial old guard and Bitcoin:
This is the web version of Fortune Crypto, a daily newsletter on the coins, companies, and people shaping the world of crypto. Sign up for free.
