Elon Musk, the world’s richest man and founder of Tesla and SpaceX, is working to transform his social media platform X into a virtual wallet where people can send money to one another. However, this move has raised concerns over conflict of interest due to Musk’s ties to federal agencies under President Trump’s administration.
Musk’s company, X, has been criticized for having numerous conflicts of interest involving its businesses. The Consumer Financial Protection Bureau (CFPB) has been a key regulator in the industry, but Musk’s team is trying to dismantle it. Last week, Musk marked the moment on X by writing “CFPB RIP” alongside an emoji of a gravestone.
Critics argue that this move would allow Musk to neutralize a regulator that could bring cases against payment companies, including his own business. Richard Cordray, former director of the CFPB, said Musk’s actions are a “blatant conflict of interest.” The White House has defended Musk, saying he is not gaining anything from his deregulation role.
The CFPB has been actively pursuing enforcement actions against major payment companies, including Block, which owns Cash App. The bureau has also sued several banks for their operation of Zelle, a payment system that has been criticized for enabling fraudulent transactions. X has partnered with Visa to build a peer-to-peer payment system called the X Money Account, which could charge fees for transactions.
The deal allows users to make peer-to-peer payments from debit cards and transfer funds into their bank accounts. Musk sees this addition as critical to X’s growth, projecting that it could generate $1.3 billion in revenue by 2028. However, critics argue that this move would allow Musk to create a payment business without having to contend with the CFPB.
As Musk’s team works to reshape federal agencies like the CFPB, they have been designated as presidential records, shielding them from public access until at least 2034. The White House has stated that all documents produced or received by Musk’s team are fully public, but critics argue that this does not address concerns over conflict of interest.
The partnership between X and Visa marks a major step for the company towards becoming an “everything app.” However, critics remain skeptical about Musk’s intentions and fear that his deregulation efforts could have far-reaching consequences for the financial industry.
Source: https://www.nytimes.com/2025/02/12/business/elon-musk-cfpb-x-money.html