A rumor was published yesterday that Twitter may be ready to launch a new feature, called Coins, in partnership with Stripe: could it mark the entry of crypto into the social network?
Twitter is working on Coins purchasing screen
On the web, Twitter Coins purchase will be done through Stripe https://t.co/RFpWswnZfG pic.twitter.com/eAzPWjfoye
— Jane Manchun Wong (@wongmjane) January 10, 2023
The new Twitter Coins would not be a cryptocurrency, but merely vouchers that can be sent as gifts to creators, who in turn can redeem them in fiat currency through Stripe.
Crypto, Stripe and Twitter
In July last year, Stripe officially announced the start of testing with Twitter to introduce crypto payments.
Hey Tim—great question! Currently, crypto payouts are being tested with Twitter, which you can find more details on here: https://t.co/xJnpLmb0lN.
— Stripe (@stripe) July 8, 2022
At the time, the reins of Twitter had not yet been taken by Elon Musk, who has since suspended many of the tests that were underway. So it is possible that Stripe’s testing was also discontinued.
However, the fact is that Twitter already uses Stripe Connect to pay creators, so the test was only aimed at adding cryptocurrencies to the means of payment already existing and integrated within the famous social network’s platform.
Thanks to Stripe Connect in this way Twitter creators could also cash their earnings in cryptocurrencies on their non-custodial wallets.
Therefore, some Stripe features are already integrated into Twitter, and in the future cryptocurrency payments could be added to these by Stripe.
Moreover, the company also said that initial support would only be for payments in USDC, which is one of the most regulated stablecoins in the world among those pegged to the US dollar.
What’s more, they specified that crypto payments would be made via the Polygon network, so as to take advantage of low transaction costs, with the option for creators to switch to the Ethereum network once tokens are received.
At this point, it is entirely safe to assume that Stripe is the technical partner with whom Twitter will handle transactions for the eventual new Coins feature.
Twitter Coins
The coins that might be introduced within Twitter are not cryptocurrencies at all.
Many believed that Elon Musk would introduce the use of Dogecoin within the platform, but apparently he opted for a more “traditional” solution instead.
In fact, coins will be nothing more than transactions within the Twitter platform, which can be bought and sold in fiat currency through Stripe.
At this time, not only has this feature not yet been added, but apparently it has not even been definitively decided whether to add it or not. In other words, at present, as far as is known, it is simply being tested.
Should it be released with the features known to date, it will give users the ability to purchase coins by paying with Stripe, and then spend them within the platform by sending them to creators.
The creators themselves, once they receive coins, will be able to redeem them in fiat currency via Stripe.
However should Stripe actually add crypto payments, at that point Twitter Coins could be bought and sold also in cryptocurrencies.
Dogecoin
When it was announced that Elon Musk would take over Twitter in late October 2022, the market value of DOGE skyrocketed in just a few days from $0.06 to $0.14, meaning that it more than doubled.
But then it was soon discovered that Musk had no intention of integrating Dogecoin into Twitter in the short term, and with the failure of FTX, the price of Dogecoin collapsed again to $0.07 within days.
Thereafter, after a couple of rebounds caused again by the possibility of the integration by Twitter, the price fell even below $0.07, and then returned well above in the last few days.
Thus, the current price is well above October’s $0.06, but remains -89% from the all-time highs of May 2021, which is when Elon Musk participated on Saturday Night Live as Dogefather.
It is worth noting that in June 2022, the price of DOGE had also fallen to $0.05, so current levels are definitely above the bottom of this cycle.
The future of Twitter and crypto payments with Stripe
There is no doubt that, as Musk himself confirmed, the future of Twitter also involves payments, and it is unthinkable that somehow the platform will not end up integrating crypto payments as well.
For now, though, it seems highly likely that it will not do so by integrating native payment functions internally, but by relying on external platforms such as Stripe.
On the other hand, for Twitter to develop an internal payments platform from scratch right now would be too risky and expensive, so by relying on Stripe it would gain more immediate and economic benefits, and with enormously lower levels of risk.
It should not be forgotten that Stripe was founded in 2011, so it has been operating successfully in the markets for a dozen years.
Among other things, Stripe was founded as a competitor to PayPal, which is a company co-founded by Musk himself that is now a public company without a single owner. Also among the first investors in Stripe in 2011 was the other PayPal co-founder Peter Thiel.
Source: https://en.cryptonomist.ch/2023/01/12/stripe-crypto-payments-twitter/