Elon Musk said Tuesday that Tesla will begin accepting Dogecoin as a form of payment for some of its merchandise.
"Tesla will make some merch buyable with Doge & see how it goes," the electric-car maker’s chief executive tweeted, sending the meme token soaring more than 23%.
Musk, who was recently named Time's Person of the Year for 2021, told the outlet that the world's largest cryptocurrency, Bitcoin, is fundamentally "not a good substitute for transactional currency."
″The transaction volume of bitcoin is low, and the cost per transaction is high," he said, adding that it is more suitable as a "store of value."
Despite being created as a joke, Musk argues that Dogecoin is "better suited for transactions," has "much higher potential" when it comes to volume for transactions per day, and ultimately "encourages people to spend, rather than sort of hoard as a store of value."
Though Tesla reversed course in May on potentially using bitcoin as an alternative form of payment for its cars, the company still has bitcoin on its balance sheet after making a $1.5 billion purchase earlier this year. Still, Musk and others have criticized the digital currency for its environmental impact and massive energy consumption.
Tesla shares fell more than 2% in premarket trading following the announcement.