Elon Musk’s plan to roll out a payments service called X Money has drawn sharp scrutiny from lawmakers and crypto industry voices, who say the move could pose risks to consumers, financial stability and national security.
Sen. Elizabeth Warren (D–Mass.), a member of the Senate Banking Committee, sent a formal letter to Musk this week raising a host of concerns ahead of a proposed April launch. In the letter, Warren flagged potential consumer protections, systemic-risk and national-security issues tied to the product and requested a written response by April 21 outlining Musk’s plans and how X intends to mitigate those risks.
Key concerns Warren cited
- Bank partner: Warren noted reports that X Money may partner with Cross River Bank, which was the subject of an FDIC enforcement action in 2023 for “unsafe and unsound practices.”
- High-yield promises: X’s preview materials suggest users could earn up to 6% APY on deposit accounts. Warren questioned what risky investments or strategies X would use to generate that yield when the Federal funds rate stands at 3.75%.
- Platform safety and illicit use: The senator pointed to X’s history of permitting sanctioned entities such as Hezbollah and the Houthis to buy verified accounts and raise funds, along with broader failures at the platform to curb child sexual abuse material, data-privacy violations, and fraud carried out by verified users.
- Regulatory self-dealing risk: Warren warned that X could shape rules that affect its own product, especially if X Money includes stablecoin issuance. She singled out a provision in the so-called GENIUS Act that she calls a “suspicious carveout,” arguing it could allow firms like X to issue stablecoins without the same approvals and guardrails that other financial firms must meet.
Industry reaction: threat to fintechs, a new financial stack
Crypto commentator Tat Thang wrote on X that X Money—together with other in-app financial features—represents an existential threat to incumbent fintechs. He highlighted X’s expanding financial stack: Smart Cashtags, which let users search any asset ticker and see real-time data without leaving the app, went live this week; brokerage routing through Wealthsimple is already operational; and X Money remains in beta. Musk has suggested the payments product could go public in April.
Thang argued that with roughly 550 million monthly users, X doesn’t need to build the best fintech product—it only needs to build one that’s “good enough” inside an app people already use, a dynamic he says could overwhelm standalone fintech competitors like Robinhood.
What’s next
Warren has given X until April 21 to respond in writing. Regulators and industry watchers will be closely watching both the content of X’s reply and how quickly the company moves to scale financial offerings within the social platform. If X proceeds with stablecoin plans or high-yield deposit features, it is likely to face intensified scrutiny from lawmakers and regulators as those products roll out.
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