Elon Musk, the world's wealthiest man, is widely known for accumulating his fortune through his electric car company Tesla and SpaceX, the rocket carrier he founded.
However, he began his career trying to disrupt consumer finance as a co-founder of a digital financial services company that later became PayPal. Now he is working to convert X.com, a social media platform, into a virtual wallet where people can send money to each other.
These types of digital payment platforms, run by other tech companies like Apple and Meta, are under intense scrutiny by the Consumer Financial Protection Bureau.
However, that scrutiny is likely to be eased primarily for Musk.
More recently, Musk's government efficiency team, not an official executive, has descended on the Consumer Bureau and accessed its headquarters and computer systems as part of a broader effort to dismantle it.
Last week, Musk marked the moment with X and wrote “CFPB RIP” along with the tombstone emoji.
As Musk's deregulation teams pass through multiple federal agencies, he has been criticized for having numerous conflicts of interest related to his business.
At X, one of the most promising ways Musk can make a profit is through the payment business, where you can charge for transactions. Building that business has a recent track record of filing lawsuits against payment companies without fighting regulators like the Consumer Bureau.
“Elon Musk is currently in the financial products market,” he said, the first director of the department under President Barack Obama, and remained at work throughout the first year of Trump's first presidency. . “It's very convenient that he's trying to neutralize the regulators he has to answer.”
“It's a blatant conflict of interest,” continued Cordray. “If he was a civil servant, that's not allowed.”
Trump defended Musk, saying he “gets nothing” from his deregulation role. Last week, White House officials said it was up to Musk to police his own actions.
In his appearance in the co-oval office with Trump on Tuesday, Musk said all his team's actions were “fully public.”
“You can see everything that's going on, you can see, are I doing something that benefits one of my companies?” Musk added. “That's totally obvious.”
However, the White House designates all documents created or received by Musk's team as presidential records, protecting them from public access until at least 2034.
Representatives from X and the Consumer Affairs Bureau did not respond to requests for comment.
Digital payment apps have become a central part of the way Americans trade. Apple, Google, PayPal, and Block own cash apps, but are all major players.
And the Consumer Bureau was the leading federal financial regulator for these non-banking technology companies.
Three months ago, the rules (in effected last month) that granted supervisory authority to digital payment companies were finalized. This allows agent examiners to dig deeper into the details of those companies' payment systems and transaction data.
And recently, the bureau has been actively pursuing enforcement measures against some of the largest companies in the industry. Last month, it accused Block, which owns the Cash app, of making fraudulent transactions and ordering consumers to return $120 million. In December, Zel said that Rohit Chopra, the Biden-era director of consumer agency, “it became a gold mine for con artists, but often left the victims to protect them for themselves.” He sued several banks for management. (Banks are denying fraud and fighting lawsuits.)
Musk's X and other trade groups representing other financial technology companies sued the Consumer Bureau last month, challenging the authority to set rules governing the industry. A trade group lawyer called out Trump and complained that the Consumer Bureau had advanced the rules before the new administration took office.
On Friday, President Trump established Russell Vought, and was confirmed as acting director of the agency as new Director of the Management and Budget. Vought ordered agency staff to halt all work, including oversight and enforcement.
He also ordered them to “stop pending investigations” in emails from all staff members reviewed by The New York Times.
In January, Musk announced his partnership with Visa and created a peer-to-peer payment system called the X-Money Account. The deal was a huge step for X to become what X calls “all apps.” Under this agreement, users can make peer-to-peer payments from their debit cards and transfer funds to their bank accounts.
Musk believes that adding payment capabilities to X is important for the company's growth.
In 2022, Musk predicted that within a year the platform could generate $15 million from payments. (The revenues were not realized as X seeks regulatory approval to process the transaction.) By 2028, that number could skyrocket to around $1.3 billion. He claimed in a pitchbook that was widespread among contract fundraisers.
At the time, more than 90% of Twitter revenue came from advertising dollars. According to Pitchbook, developing payment features will unlock apps from advertisers by replacing the revenue with subscriptions and fees from the payment business.
Musk suggests these broader ambitions with X. In November, he posted a screenshot of Joe Rogan's X account. This included a “$” button, which prompted widespread speculation about whether social media platforms would start offering payment capabilities.
Progress was slow as X needs to protect remittance licenses in all states to implement systems across the country. The company currently holds these licenses in more than 30 states.
Visa transactions allow X to transfer money over Visa's network, rather than obtaining its own license.
In an X's post that announced the visa transaction last month, X's CEO Linda Jaccarino predicted the epic plan. “The first of many big announcements about X-money this year,” she wrote.
