Senator Warren Challenges Elon Musk Over X Money Stablecoin Integration

Senator Elizabeth Warren has formally questioned Elon Musk regarding the integration of "X Money," a planned payments feature for the X social media platform. In a letter sent Tuesday, the Massachusetts Democrat expressed concerns that the platform's potential use of stablecoins and cryptocurrency could introduce systemic risks to the US financial system and jeopardize national security. The inquiry specifically targets the "Guiding and Establishing National Innovation for US Stablecoins" (GENIUS) Act. This legislation provides a legal carveout allowing private, non-bank entities to issue their own dollar-pegged stablecoins. Warren is questioning whether X intends to utilize this provision to launch its own digital asset. According to the Senator, beta previews of X Money suggest the platform may offer 6% interest on deposits. Furthermore, Warren highlighted X's partnership with Cross River Bank, an institution that has previously been subject to enforcement actions by the Federal Deposit Insurance Corporation (FDIC). A critical point of contention is the lack of consumer protection. FDIC Chair Travis Hill has clarified that under the GENIUS Act, stablecoin deposits are not guaranteed by the US government. While pass-through insurance remains a theoretical possibility, Hill noted that such an arrangement would be inconsistent with the broader regulatory framework. This pushback suggests a growing legislative appetite to tighten the rules surrounding tech-led financial services.