Warren: X Money launch could risk consumers, stability

Sen. Elizabeth Warren wrote to Elon Musk that X Money planned launch in April could threaten consumer protection, national security and financial stability. Warren cited X Payments’ 40 state money-transmitter licenses and preview materials that indicate deposit accounts could pay up to 6% APY.

Warren wrote, “If your track record operating X is any indication of how you’ll operate X Money, consumers, our national security, and the stability of the financial system may be at risk.” She also referenced content and safety issues on X since Musk took over, including the production of child sexual abuse material tied to the platform’s AI chatbot Grok.

The senator noted the advertised yield for X Money accounts is higher than the current Federal Funds Rate range of 3.5% to 3.75% and flagged possible implications if a large platform offers outsized returns without the same oversight applied to banks.

Warren identified Cross River Bank as a potential partner and pointed to Federal Deposit Insurance Corporation enforcement actions against the bank in 2018 and 2023 for unsafe lending practices and unfair or deceptive conduct. She requested information on any relationship between X Money and Cross River.

The letter asks X to provide documentation on the 40 state licenses, copies of agreements with banks or other financial firms, and disclosures explaining how yields will be funded and what recourse customers will have for disputes.

Warren also raised concerns about recent federal policy changes. She cited a restructuring of the Consumer Financial Protection Bureau and the GENIUS Act, which she says creates a carveout allowing private companies to issue stablecoins without the approvals and guardrails that apply to public commercial companies.

X launched a limited-access beta of X Money last year with Visa. The platform added features such as “smart cashtags” that let users view and link to financial data and, according to company product staff, to trade stocks and crypto from the timeline. Nikita Bier, X’s head of product, said at the time the company was building data tools and links and not handling trade execution or acting as a brokerage.

Elon Musk announced X Money will enter early public access in April and described the app as allowing direct deposit, yield and in-app payments. The company has not confirmed whether cryptocurrency payments or Dogecoin integration will be available at launch. X has not disclosed full details about how customer funds would be held, whether accounts would be insured, or what back-end protections will be used.