NYDFS tells X Money to scrap interest payments on balances from October 1

New York’s financial regulator (NYDFS) has informed X, owned by Elon Musk, of its inability to pay interest on X money balances belonging to New York customers. NYDFS went on to say that the yield on such accounts will drop to 0.00% on October 1, 2026.

The announcement yanks one of X’s major perks from its users in what many would consider the largest financial market in America, barely weeks after X Money was launched across the country.

APY falls to zero as X never obtained a New York license. 

Sawyer Merritt spotted the change and stated so in an X post on September 1, 2026. According to the post, the New York Department of Financial Services (NYDFS) informed X that it cannot pay interest on X Money balances and that New York accounts will receive no interest as of October 1.

X Money relies on yield as a marketing tool to attract users. When X Money was launched, it advertised a 6% APY for Premium Plus subscribers, while standard Premium users would enjoy such a rate once their deposits crossed a particular threshold or met a direct-deposit requirement. 

Also, X offered users a metal Visa debit card linked to a user’s X handle, no fees on peer-to-peer transfers, and Apple Pay and Google Pay support. 

For New Yorkers, however, the choice to earn interest is gone.    

New York and Massachusetts not part of the nationwide launch

X Money was made available to all Premium and Premium+ subscribers with US accounts on August 31. This was announced by the company in its post. However, not all states were covered in the nationwide rollout. 

When X Money was launched, X Payments LLC, a money-services subsidiary of X, had obtained money transmitter licenses in 41 states and D.C., with New York and Massachusetts absent. 

Around 4.4 million Premium subscribers are eligible to use X Money, and as of its July rollout, New York had not made a decision, and X Money was still without a license.

Today’s decision did not come without precedent. State Senator Brad Hoylman-Sigal and Assembly member Micah Lasher encouraged the NYDFS to deny X a money transmitter license in a May 2025 letter. They cited Musk’s conduct at DOGE and worries about X’s management of consumer data.

NYDFS is hard to please

The pause in interest is consistent with the agency’s reputation. Cryptopolitan has previously reported on the strict operation that the DFS runs as a state-level financial regulator. It’s regarded as a pacesetter by banks and crypto issuers. 

In July, after Circle had received a limited purpose trust charter from the DFS, Circle’s CEO, Jeremy Allaire, called the DFS “an international standard setter for digital asset regulation.”

The department has begun tightening rules. Cryptopolitan reported in June that the DFS proposed new stablecoin regulations intended to match the GENIUS ACT while it maintains its existing safeguards. This includes full reserve backing and independent audits. 

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