X Money, the new add-on to the social media platform owned by Elon Musk, has the potential to disrupt the payments industry in the U.S. — including negatively impacting PayPal’s business — Mizuho research analysts said on Thursday.
However, New York State’s recently introduced CRYPTO Act could complicate any future plans X Money may have for integrating crypto payments, they said.
“The proposed New York CRYPTO Act would criminalize unlicensed virtual currency business activity in the state, raising the stakes for X’s potential, eventual crypto integration,” Mizuho analysts Dan Dolev and Andrew Jenkins wrote in a note to clients.
They also said the Clarity Act, which might end up limiting non-bank financial platforms’ ability to offer customers yield, could hinder X Money’s proposal to offer customers 6% annual percentage yield on cash balances.
“The timing of X Money’s 6% APY launch is particularly sensitive,” given the Clarity Act, the analysts added.
Whether or not platforms should be able to offer users some kind of yield, or rewards, for holding crypto, principally stablecoins, has been a major sticking point in efforts to advance the Clarity Act. The new legislation is meant to create a broad regulatory framework for digital assets.
New York State’s Cryptocurrency Regulation Yields Protections, Trust, and Oversight (CRYPTO) Act seeks to criminalize unlicensed virtual currency businesses operating in the state.
X Money’s impact on PayPal, Venmo
Aside from those potential headwinds, Mizuho’s analysts see significant potential for X Money.
“X Money – expected to launch in April – is X/Twitter’s financial infrastructure layer for an Everything App, aiming to fuse messaging, banking/yield and commerce the way WeChat Pay or Alipay do in Asia,” they wrote. “The combination of X’s global reach (500-600mn MAUs) and Musk’s history in payments as the co-founder of PayPal, means X Money has the potential to disrupt U.S. payments.”
The Mizuho analysts downgraded PayPal’s stock (PYPL) to a “neutral” rating, saying that the fintech and its Venmo app “face the most direct substitution risk as X targets the same P2P and wallet entry points.”
X Money is designed to turn X into an “everything app,” similar to platforms like WeChat in China. This week, X launched “Cashtags,” a new feature that lets users view financial data on stocks and cryptocurrencies directly within their timelines.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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