U.S. Senator Warren blasts Musk, X Money, threatening financial stability! Questions loopholes in the 6% high-interest and stablecoin legislation

Elon Musk’s “Universal App” dream hits a snag?
The U.S. federal senator Elizabeth Warren, who has always maintained strict regulation of cryptocurrencies and big tech companies, recently wrote to Musk, strongly warning that the upcoming “X Money” payment platform launching in April will threaten the stability of the U.S. financial system.
She not only questioned the extremely high 6% annualized return offered by X Money but also pointed out that the recent GENIUS Act leaves dangerous regulatory loopholes for private companies issuing stablecoins.
(Background summary: Musk’s X Money metal card exposed: 3% unlimited cashback, 6% annual interest rate, public beta in April to enter the U.S. financial landscape)
(Additional background: Musk’s X Money public beta imminent: Can Dogecoin leverage this to break the $0.2 barrier?)

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• Questioning the 6% ultra-high APY and high-risk partners
• Criticizing the GENIUS Act for opening a backdoor to stablecoin issuance
• The suspense over integrating cryptocurrency payments and Dogecoin

As the community platform X (formerly Twitter) accelerates its transformation into an “Everything App,” its upcoming payment feature “X Money” has officially come under the radar of the U.S. Congress.

U.S. Democratic Senator Elizabeth Warren formally sent a letter to Elon Musk, owner of X, on Tuesday, expressing deep concerns about the planned launch of X Money in April this year. She sternly pointed out in her letter:

“If your track record of operating X reflects how you will run X Money in the future, then consumers, our national security, and the stability of the financial system will face enormous risks.”

Questioning the 6% ultra-high APY and high-risk partners

Warren emphasized Musk’s past management failures at X (such as his AI chatbot Grok generating content involving child abuse), which makes it difficult to trust him to safely expand into consumer finance.

Currently, X’s subsidiary X Payments has obtained money transfer licenses in 40 states. However, what truly alarmed Warren was the preview data of X Money showing that its deposit accounts will offer an annualized yield (APY) of up to 6%. Warren pointed out that this is far above the current federal funds rate of 3.5% to 3.75%, raising questions about the underlying business model and risk management.

Additionally, Warren strongly disapproved of X Money’s potential partnership with Cross River Bank. The bank has faced enforcement actions from the FDIC in 2018 and 2023 due to “unsafe lending practices” and “unfair and deceptive conduct.”

Criticizing the GENIUS Act for opening a backdoor to stablecoin issuance

The timing of this warning coincides with significant changes in the U.S. regulatory environment. Warren noted that during Musk’s tenure as a senior advisor to President Trump, the Trump administration and CFPB acting director Russ Vought collaborated to fundamentally reorganize the federal agency responsible for regulating consumer financial products like X Money.

More critically, Warren targeted the GENIUS Act enacted during the Trump administration. She believes the legislation creates a “suspicious carveout,” allowing private companies like X to issue stablecoins without the “approval and guardrails” that publicly traded companies are required to follow, which could pose a major risk to the financial system.

The suspense over integrating cryptocurrency payments and Dogecoin

X Money partnered with Visa last year to launch a “highly restricted access” beta version, and earlier this year added “Smart cashtags” that let users link directly from their feed to external platforms for trading stocks and cryptocurrencies.

Although X’s product lead clarified that the platform “does not act as a broker or handle trade execution,” speculation about whether X Money will directly incorporate cryptocurrency payments (especially Dogecoin, Musk’s favorite) has never ceased. Currently, X has not announced any concrete details about crypto features, but Musk has retweeted third-party predictions that the app will eventually integrate “loans, money market accounts, and cryptocurrencies,” leaving endless room for market imagination.