Democratic Senator slams X Money in blistering letter to Elon Musk

By TheStreet Roundtable

about 2 hours ago

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Senator Elizabeth Warren (D-MA) wrote a blistering letter to X Corp. owner Elon Musk on Apr. 14.

The Democrat leader expressed her concern that the upcoming X Money feature could pose threats to consumers, national security, and the financial system in the U.S.

X to turn into 'everything app'

Earlier, X product head Nikita Bier announced the launch of the Cashtags feature in the U.S. and Canada on iPhone, bringing real-time financial data to the social media platform.

Whether it's cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), or stocks like Tesla (Nasdaq: TSLA), NVIDIA (Nasdaq: NVDA), and Spotify (Nasdaq: SPOT), the Cashtags feature lets X users access real-time financial data.

X Money is also on the way, which, Musk says, will turn the social media giant into an "everything app."

But Warren has expressed her reservations about the feature integrating stablecoin and crypto assets.

Warren raises concerns about X Money

The Democrat leader asked Musk whether X Money will issue a stablecoin by "exploiting a special carveout" in the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for private companies like X.

She also questioned X Money's potential partnership with Cross River Bank for banking services, given the fact that it was subject to enforcement action by the Federal Deposit Insurance Corporation (FDIC) in 2018 and 2023.

The senator also questioned what kind of "risky investments" or "gimmicks" X Money will integrate to offer 6% interest on deposits, given that the target Federal Funds Rate is 3.50%-3.75%.

"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 also criticized Musk for allegedly failing to run X in a "safe and responsible manner."

She cited the instances of Grok generating child sexual abuse material, data privacy violations, sanctioned individuals being granted the "blue checkmark," and verified accounts perpetrating scams.

Senator questions Musk on CFPB

Warren asked Musk how X Money will disclose to users that the FDIC deposit insurance won't protect them against the platform's failure.

She also asked him if he or any individual working on his behalf at the Department of Government Efficiency (DOGE) lobbied with the Donald Trump administration for the provision allowing private companies to issue a stablecoin in the GENIUST Act.

Warren also questioned the billionaire about his “CFPB RIP” post regarding his alleged attempt to dismantle the authority of the Consumer Financial Protection Bureau (CFPB).

The CFPB is an independent agency responsible for consumer protection in the financial sector in the U.S. Warren claimed the agency would have jurisdiction over X Money.