Elizabeth Warren Warns Elon Musk's X Money Threatens 'Stability of the Financial System'

The Massachusetts Senator warned of consumer protection gaps as Musk's payment platform launches amid weakened federal oversight.

In brief

• Senator Elizabeth Warren raised concerns about X Money's planned April launch, citing consumer protection, national security, and financial stability risks.
• Warren highlighted X Money’s acquisition of 40 state money transmitter licenses and preview materials suggesting it will offer deposit accounts with up to 6% APY.
• The Senator also flagged a "suspicious carveout" in the GENIUS Act's that she argues advantages private companies like X in issuing stablecoins.

Senator Elizabeth Warren (D-MA) raised fresh concerns Tuesday about the planned April launch of X Money in a letter to its owner Elon Musk.

In the letter to the billionaire entrepreneur, Warren flagged potential risks to consumers and financial stability, stating that, “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.”

Warren noted that since acquiring Twitter and rebranding it as X, Musk has openly pursued building an "everything app" that would handle users' "entire financial world." She cited his statements that X could "become the biggest financial institution in the world" and eliminate the need for traditional bank accounts.

"Your failure to operate X in a safe and responsible manner does not breed confidence in your ability to safely expand into consumer finance," the Senator wrote, highlighting issues with X including the production of child sexual abuse material by the platform’s AI chatbot Grok.

X has already secured a slew of state money transmitter licenses for the payment platform through its subsidiary X Payments. Preview materials indicate that users can earn up to 6% APY on deposit accounts—significantly above the current Federal Funds Rate range of 3.5-3.75%, the Senator noted.

Buying Twitter is an accelerant to creating X, the everything app

— Elon Musk (@elonmusk) October 4, 2022

Warren expressed particular concern about the potential of X Money partnering with Cross River Bank, which faced FDIC enforcement actions in both 2018 and 2023 for “unsafe” lending practices and “unfair and deceptive practices.”

Her scrutiny of X Money arrives amid a transformed regulatory landscape. During Musk's tenure as senior adviser to President Trump, Warren noted, the administration worked with Acting CFPB Director Russ Vought to fundamentally restructure the Consumer Financial Protection Bureau—the federal agency that would normally police consumer financial products like X Money.

The Trump administration has also enacted the GENIUS Act, legislation Warren argues has created a “suspicious carveout” for private companies like X to issue stablecoins without the “required approvals and guardrails” that apply to public commercial companies.

X Money and crypto

Launched in a “very limited access beta” in partnership with Visa last year, X Money is a cornerstone of Musk’s ambition to transform X into an "everything app" with integrated financial services. Earlier this year, the platform added “smart cashtags,” enabling users to “to trade stocks and crypto directly from timeline,” according to the firm’s Head of Product NIkita Bier. At the time, Bier clarified that, “X is not handling trade execution or acting as a brokerage,” adding that the firm is “just building the financial data tools and links.”

The question of whether X Money will feature crypto payments has sparked much debate—and price action, particularly linked to Dogecoin, the meme coin enthusiastically endorsed by Musk as his “favorite cryptocurrency.”

To date, however, the firm has yet to share any hard details pointing to crypto functionality, though Musk has retweeted a third-party forecast of the app’s future features including loans, money market accounts, and “crypto integration.”

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