The promise of a 6% return on deposits through a cryptocurrency-linked payment platform is raising alarms in Washington β and one senator wants answers.
Warren focuses on the numbers
According to Senator Elizabeth Warren, the math doesn’t add up. Since the federal funds rate is between 3.5% and 3.75%, the Massachusetts Democrat found X Money’s announced 6% return on deposits suspicious enough to put it in writing.
In one letter Warren asked Elon Musk on Tuesday how this return was even possible – and what risks customers could take without knowing it.
X Money is a payment feature integrated into the X social media platform. A limited beta preview is already out, so Warren has plenty to work with.
She cited Cross River Bank, X Money’s listed partner, as a concern. The bank previously faced enforcement action from the Federal Deposit Insurance Corporation.
Senator Elizabeth Warren requested details on the upcoming X Money launch in a letter, according to the Senate Committee on Banking, Housing and Urban Affairs.
labyrinth questioned whether the 6% return was funded by risky investments, aggressive data collection, or other undisclosed practices.
National security on the table
The letter didn’t stop at interest rates. Warren told Musk that X Money is expected to move to stablecoins Cryptocurrency could endanger the financial system as a whole and US national security.
Warren is a long-timer critic both the crypto industry and Musk personally, and the letter reflects both positions.
ELON MUSK’S π HAVE JUST ANNOUNCED THAT THEY WILL BE LAUNCHING SOON #BITCOIN AND CRYPTO PRODUCTβ¦
Elon Musk is about to launch π MONEY?
This is going to be HUGE for Crypto! π pic.twitter.com/bfKKEUU3mo
β Crypto Rover (@cryptorover) April 14, 2026
At the heart of their concern is a provision in the Guiding and Establishing National Innovation for US Stablecoins Act β better known as the GENIUS Act. This legislation allows private companies, including non-banks, to issue their own dollar-backed tokens.
A set of questions outlined in a letter from Senator Elizabeth Warren to Elon Musk, as released by the SCBHUA.
Warren asked whether X wants to use this opening to launch its own stablecoin. Related to ReportsThe law’s framework has faced resistance from Democratic lawmakers who view it as too permissive to technology companies seeking to enter the financial services sector.
Deposit insurance not in the picture
Warren too pressed Musk on what regular users would learn about federal deposit insurance β or lack thereof.
FDIC Chairman Travis Hill confirmed in March that stablecoin deposits would be held through platforms like X money would not be covered by federal insurance under the GENIUS Act.
Hill noted that the law does not specifically block pass-through insurance protection, which would extend FDIC protection to individual users up to $250,000 in the event of a business failure. However, he said allowing this would contradict the overall intent of the framework.
Warren’s letter asked whether X-Money customers would be clearly informed that their funds do not have government backing. It’s a fundamental consumer question – one that hasn’t yet been answered publicly.
Musk has not yet responded to the letter.
Featured image from IndieHackers, chart from TradingView
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