Warren to Elon: 'Cool 6% APY, But Maybe Don't Break the Financial System in the Process?'

Senator Elizabeth Warren is officially worried about X Money—and she's not keeping it subtle.

In a letter to Elon Musk this week, the Massachusetts Democrat flagged serious concerns about the planned April launch of X Money, warning that Musk's track record with X doesn't exactly inspire confidence in his ability to safely expand into consumer finance. Warren pointed to the platform's history of issues, including the production of child sexual abuse material by its AI chatbot Grok.

Warren also raised red flags about X Money's potential partnership with Cross River Bank, which has faced FDIC enforcement actions in both 2018 and 2023 for unsafe lending practices. She's also concerned about the regulatory landscape, noting that the Trump administration has worked to fundamentally restructure the Consumer Financial Protection Bureau—the agency that would typically oversee consumer financial products like X Money.

The Senator also called out the GENIUS Act, arguing it created a suspicious carveout allowing private companies like X to issue stablecoins without the same approvals and guardrails required of public commercial companies.

X Money has already secured state money transmitter licenses through its subsidiary X Payments. Preview materials show users could earn up to 6% APY on deposits—well above the current Federal Funds Rate range of 3.5-3.75%.

Launched in a limited beta with Visa last year, X Money is central to Musk's vision for an "everything app" handling users' entire financial world. Earlier this year, the platform added "smart cashtags" enabling users to trade stocks and crypto directly from the timeline. The firm clarified it's not handling trade execution or acting as a brokerage—just building financial data tools and links.

The potential for crypto payments has sparked debate, particularly around Dogecoin—Musk's self-proclaimed favorite cryptocurrency. So far, though, X hasn't shared concrete details about crypto functionality, though Musk has retweeted forecasts mentioning loans, money market accounts, and crypto integration.