Right after Mr. Musk announced the new features of X Payments, an interesting reaction was seen in the market. This new payment service, X Money, will be rolled out in more than 40 U.S. states starting next month, and at the moment the announcement was made, Dogecoin temporarily surged.

However, this is the important point. X Money is actually a pure fiat payment product. It offers features such as peer-to-peer transfers, linking bank accounts, debit cards, and cashback rewards, but it’s not a cryptocurrency wallet—it’s closer to a social-media-linked fintech app like Venmo. So why did DOGE react? It’s probably because Mr. Musk has previously hinted at the possibility of integrating cryptocurrencies.

In fact, the product owner of X Payments stated as early as February that crypto trading tools would be introduced through Smart Cashtags, but the platform itself would not execute trades. In other words, it will only provide data and links to exchanges.

What regulators are paying closer attention to is the 6% annual interest rate that X Money is proposing. Offering a 6% annual return on balances inside a social media app that could be used by hundreds of millions of people is a level that’s almost higher than most regular savings accounts in the United States. It’s on par with money market funds.

This timing is delicate, because Congress is currently debating the CLARITY Act. The main policy issue is whether non-bank platforms should be allowed to offer deposit-like yields to consumers. The Senate Banking Committee is planning to work on amendments from mid- to late-March, but if X Money launches in full before the CLARITY Act is enacted, it will create a rather strange situation—namely, that a fiat payment product inside a social media app could offer higher yields than regulated crypto asset stablecoin products.

By the way, current DOGE is at $0.11, up 0.58% over the past 24 hours. This kind of reflexive price movement has been repeated many times since 2021, and each time Mr. Musk mentions X Payments, DOGE spikes on expectations of crypto integration. But in reality, it’s the same this time as well: the focus is still mainly on expanding payment functions, and crypto assets are not directly involved this time either.

If the 6% yield from X Payments is truly implemented, it’s worth keeping a close eye on both the regulatory and market implications.