Here's an interesting point — Musk just announced that X will launch X Money as early as April. The payment feature will include transfers between users, the ability to hold funds in an account, a debit card, and cashback through a partnership with Visa. The platform has obtained licenses in more than 40 U.S. states, so this is a serious move.

Of course, immediately Dogecoin surged on the wave of speculation about cryptocurrency integration. But here’s the catch — Musk didn’t say anything about crypto. X Money is a regular fiat product, more similar to Venmo with social features than a crypto wallet. Yes, Musk previously called DOGE his favorite cryptocurrency, and Tesla even accepted DOGE in 2022, but that has nothing to do with the new payment service. Currently, DOGE is trading at around $0.09, down 0.12% in the last 24 hours, so the initial spike quickly faded.

But there’s something more interesting in this announcement. X Money offers 6% annual interest on account balances. That’s higher than almost all savings accounts in the U.S. and comparable to money market fund yields. The question is, where does this rate come from — does the company subsidize it, is it generated through deposit lending, or supported by another mechanism? This significantly affects how regulators perceive the product.

The timing is interesting — all of this coincides with Congress’s fight to pass the CLARITY Act, which is supposed to establish rules for stablecoin products and yield offerings. The Senate Banking Committee plans to review it in mid-to-late March. The main political question: should non-bank platforms offer consumers returns comparable to bank deposits?

X Money isn’t a stablecoin product, but it targets the same consumer demand — people are looking for higher yields than their banks offer. If Musk launches this at a 6% annual rate before the CLARITY law is passed, it will make for an amusing comparison: a fintech product with fiat money that can offer yields from which crypto products are gradually being exempted by legislation. Regulators will definitely pay attention to this.