Table of Contents
ToggleAs the social media platform X (formerly Twitter) accelerates its transformation into an "Everything App," its upcoming payment platform, "X Money," has officially come under the radar of the U.S. Congress.
U.S. Democratic Senator Elizabeth Warren formally wrote to Elon Musk, owner of X Money, on Tuesday, expressing deep concerns about the platform's planned launch in April. In her letter, she pointed out:
"If your past track record of operating X represents how you will operate X Money in the future, then consumers, our national security, and the stability of the financial system will all face enormous risks."
Questioning the 6% APY and high-risk partners
In the letter, Warren highlighted Musk's past shortcomings in managing the X platform (such as his AI chatbot Grok generating content about child sexual abuse), arguing that this undermines confidence in his ability to safely expand his consumer finance business.
Currently, X's subsidiary, X Payments, has obtained money transfer licenses in 40 states. However, what truly alarmed Warren was X Money's preview materials, which showed that its deposit accounts would offer an annualized yield (APY) of up to 6% . Warren pointed out that this is far higher than the current federal funds rate range of 3.5% to 3.75%, raising questions about the underlying business model and risk management.
In addition, Warren also expressed strong dissatisfaction with X Money's potential partnership with Cross River Bank. Cross River Bank was previously subject to enforcement action by the Federal Deposit Insurance Corporation (FDIC) in 2018 and 2023 for "unsafe lending practices" and "unfair and deceptive conduct," respectively.
Criticism of the GENIUS Act for opening backdoors to the issuance of stablecoins
The timing of this warning letter comes at a time of dramatic changes in the U.S. federal regulatory environment. Warren points out that during Musk's tenure as a senior advisor to President Trump, the Trump administration worked with Acting Director Russ Vought of the Consumer Financial Protection Bureau (CFPB) to fundamentally restructure this federal agency, which was originally responsible for regulating consumer finance products such as X Money.
More importantly, Warren has turned her criticism towards the GENIUS Act enacted by the Trump administration. She argues that the legislation creates a "suspicious carveout" that allows private companies like X to issue stablecoins in the absence of the "approval and guardrail" regulations that publicly traded companies must adhere to , which could become a huge threat to the financial system.
The suspense surrounding the integration of cryptocurrency payments with Dogecoin
X Money partnered with Visa last year to launch a beta version of "Extremely Restricted Access," and earlier this year added the "Smart Cash Tags" feature, allowing users to directly link from the Newsletter to external platforms to trade stocks and cryptocurrencies.
Despite X's product manager clarifying that the platform "does not act as a broker or handle trade execution," speculation about whether X Money will directly integrate cryptocurrency payments (especially Musk's favorite Dogecoin) has never ceased. Currently, X has not released any concrete details regarding cryptocurrency functionality, but Musk has retweeted third-party predictions that the app will integrate "loans, money market accounts, and cryptocurrencies" in the future, continuing to leave the market with endless room for imagination.
Related reports
