U.S. Senator Elizabeth Warren has formally requested information from Elon Musk about X Money, an anticipated payment feature for the X social media platform. Warren, a vocal critic of private financial entities and the cryptocurrency sector, expressed concerns in a letter that X Money's planned stablecoin and cryptocurrency integrations could introduce significant risks to the U.S. financial system and national security.
She specifically questioned if X Money would issue its own stablecoin, potentially utilizing a regulatory allowance within the proposed GENIUS Act for private companies. Warren also noted that a limited preview suggests X Money will offer a 6% interest rate on deposits, partnering with Cross River Bank, an institution previously subject to Federal Deposit Insurance Corporation (FDIC) enforcement actions. She highlighted the unusual yield rate given the current Federal Funds Rate, questioning the viability and practices behind such offerings.
Further inquiries focused on whether X Money customers understand that deposits may not be protected by FDIC insurance, a point echoed by FDIC Chair Travis Hill, who stated that stablecoin user deposits are not covered under the GENIUS Act framework. The regulatory stance indicates that while direct prohibitions on pass-through insurance are not explicit, allowing it would be inconsistent with the legislation's intent.