Warren Drops the Red Tape: Senator Sounds the Alarm on Musk's X Money 6% APY Gambit

Senator Elizabeth Warren is not letting Elon Musk slide on his financial ambitions. The Massachusetts Democrat fired off a letter Tuesday raising concerns about X Money's planned April launch, warning that Musk's track record with X spells trouble for consumers and the broader financial system.

Warren didn't hold back. "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 wrote to the billionaire, who has been vocal about turning X into an "everything app" handling users' entire financial lives. Musk has even floated the idea of X becoming "the biggest financial institution in the world"—potentially making traditional bank accounts obsolete.

The Senator pointed to platform woes, including the production of child sexual abuse material by X's AI chatbot Grok, as evidence that Musk's operation hasn't exactly prioritized safety. "Your failure to operate X in a safe and responsible manner does not breed confidence in your ability to safely expand into consumer finance."

X Payments, the subsidiary handling the rollout, has already secured a stack of state money transmitter licenses. Preview materials show users can earn up to 6% APY on deposits—well above the current Fed Funds Rate range of 3.5-3.75%. That's a catchy number, but Warren's sweating the details, particularly potential ties to Cross River Bank, which has a checkered history with FDIC enforcement actions in 2018 and 2023 for unsafe lending and deceptive practices.

The timing isn't great for oversight enthusiasts either. Warren noted that during Musk's stint as senior adviser to President Trump, the administration worked with Acting CFPB Director Russ Vought to gut the Consumer Financial Protection Bureau—the agency that would typically police products like X Money. The GENIUS Act also created what Warren calls a "suspicious carveout" letting private companies issue stablecoins without the standard approvals required of public commercial firms.

X Money debuted in a "very limited access beta" with Visa last year and recently added "smart casht