The "currency transmitter" license that Rhode Island recently issued to the company formerly known as Twitter Inc. is a common authorization in business dealings, observers say, but the state’s quick action in granting it could signal the desire of state leaders to integrate blockchain technology into Ocean State dealings.
Rhode Island recently made a splash in national tech media when it became the seventh state in the U.S. to issue a currency transmitter license to the social media platform now called X Corp., a rebranding led by its controversial owner Elon Musk.
Obtaining the license is seen as a significant indicator of the company’s intent to become a player in the financial services sector with the ability to allow users to make financial transactions, particularly using cryptocurrencies.
The license itself isn’t unusual. Any business that wishes to digitally transmit money in the state needs to acquire one, and other licensed entities include PayPal, Venmo and ApplePay. The licensure allows companies to electronically transmit money; issue or sell money orders, drafts and prepaid access or stored value; and engage in virtual currency exchanging and trading services.
But the development could reflect R.I. Commerce Corp.’s push to further integrate blockchain tech into state government, and to establish the state as welcoming to technology and innovation, said Lauren Labrecque, an associate professor of marketing at the University of Rhode Island.
“Rhode Island is not somewhere you would associate with a Silicon Valley company,” Labrecque said, and the Ocean State’s status as the seventh state to grant the licensure to X “gives us more eyeballs looking at the state, and anyone in the blockchain or crypto space might be looking to Rhode Island more and seeing we’re having favorable laws passed.”
Blockchain businesses already benefit from laws that exempt virtual currency from property taxation, among Rhode Island’s attractions to the technology. There was also a bill to establish a blockchain banking system in Rhode Island, a measure that didn't make it out of a House committee last legislative session.
Rhode Island undoubtedly wishes to attract innovation and technology, with recent pushes in this area including efforts to create a “biotech hub" in Rhode Island. When R.I. Secretary of Commerce Elizabeth M. Tanner was director of the R.I. Department of Business Regulation, she advocated for blockchain technology, which she preferred to call "distributed ledger" technology, to streamline government processes.
But officials aren’t keen to tie themselves to Musk, controversial for his business dealings and political views.
In response to a PBN inquiry on the significance of X's currency transmitter license, R.I. Commerce spokesperson Matthew Touchette highlighted other businesses and agencies to which Rhode Island had already issued licenses.
“It is important to note that Elon Musk does not have an individual license nor does the state issue individual licenses in this space,” Touchette said.
“There are applications pending in every other state,” he said. “So we anticipate there will be several other approvals in the coming weeks and months.”
Labrecque acknowledged Musk as “a very polarizing figure,” but echoed Touchette’s assertation.
“It’s the company itself [that’s licensed],” Labrecque said. “Elon Musk hasn’t gotten his own license here.”
And the recent licensure to X isn’t the Ocean State’s first association with a Musk-led company, Labrecque said, with electric vehicle manufacturer Tesla Inc. slated to open a regional hub in Providence next year.
But beyond this association, Labrecque sees it as a positive that Rhode Island is getting more press for its blockchain push through the X licensure.
“It brings attention to [the fact that] we are innovative even though we are this tiny little state,” she said.
