Twitter filed paperwork with the U.S. Treasury Department last week to become a payments processor, which could pave the way for crypto payments.
The move comes as Musk seeks to boost falling advertising revenues at the social media company known as the world’s town square.
Twitter could expand limited “Twitter tips” feature
According to the New York Times, Twitter filed its registration application with the Financial Crimes Enforcement Network (FinCEN). Any business processing money transfers, currency exchanges, or cash checks must register with FinCEN, the federal bureau responsible for combating illicit finance in the U.S.
Until now, Twitter has allowed creators to receive Bitcoin tips from fans through Strike’s application programming interface (API). The API uses the Bitcoin layer-two Lightning Network’s micropayment channels to conduct a transaction off-chain. Multiple transactions are then bundled together and sent to the main chain. Fans could also tip creators using cash.
But that was the technology’s limit until now. While it is not clear who will provide the technology for Twitter’s payments, Musk could tap a former online bank he helped found. In June 2022, PayPal rolled out a new service enabling customers in the U.S. to buy, sell, and hold Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
But don’t forget about DOGE
But crypto enthusiasts will hope that Musk’s love affair with a certain memecoin will override all other considerations.
Musk’s other company, Tesla, has allowed customers to pay Dogecoin for particular Tesla merchandise via the payments processor BitPay. Its Cyberwhistle, launched on Sep. 14, 2022, retailed for 1,000 DOGE, while a new perfume, “Burnt Hair,” could also be bought with DOGE via BitPay.
There is also the possibility that Twitter could process DOGE payments to combat spam bots on the platform.
Before the Tesla CEO bought Twitter for $44 billion, he was locked in a court battle with Twitter after pulling out of an earlier deal to buy the social media company. As part of the trial, Musk’s conversations with several former Twitter executives were revealed in an eye-opening document.
One exchange revealed that he had considered converting Twitter to a blockchain-based service, charging DOGE to combat bots on the social network.
“My Plan B is a blockchain-based version of Twitter, where the ‘tweets’ are embedded in the transaction of comments. So you’d have to pay maybe 0.1 Doge per comment or repost of that comment.” Musk said to Steve Davis, an executive colleague at Musk’s tunnel-building Boring Company.
He later abandoned the plan as infeasible. But the new FinCEN application could hint at a broader e-commerce thrust for Twitter that includes crypto payments. FinCEN’s strict anti-money laundering rules could mean that crypto enthusiasts will need to give up their identity to transact. Time will tell how the saga unfolds.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.