Senator Elizabeth Warren sent a letter to Elon Musk, raising concerns about the upcoming launch of X Money. Apparently this upcoming digital wallet that no one uses yet could destroy America as we know it. Warren wrote:
“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.”
At first, I dismissed her inquiry, solely on the basis that I don't imagine X Money ever growing large enough to reach the point that it has the influence she describes. However, she does raise some legitimate concerns. Highlights from the letter include:
“The launch comes just one year after you, working with Acting Director Russ Vought, pushed to dismantle the CFPB, the agency responsible for policing financial products like X Money.”
Note: As of April 2026, the CFPB is not technically dismantled, but it exists as a shell of its former self. Musk's urgency and desire to shutter the bureau certainly raises questions when he's simultaneously planning the launch of a financial product.
“X Money may partner with Cross River Bank to offer some of the banking products and services. As I’m sure you’re aware, Cross River Bank was subject to a serious enforcement action by the FDIC in 2023 for unsafe and unsound practices related to fair lending. The bank is a repeat offender, as it was subject to a previous FDIC enforcement action in 2018 for unfair and deceptive practices.”
To be fair, are there any U.S. banks left that don't have dirt on their hands? Cross River Bank may be a “repeat offender,” but they're all offenders.
“X Money preview materials suggest that users can earn up to 6% APY on deposit accounts. It is unclear what risky investments, intrusive data monetization activities, or gimmicks either X Money or Cross River may intend to engage in to pay that yield when the target Federal Funds Rate is 3.5-3.75%.”
This one struck a chord with me. There are plenty of legitimate investments that could earn that yield. Just because other banks keep the spread for themselves doesn't mean the vehicles don't exist. Characterizing the investments as “risky” or “gimmicks” before even learning what they are feels like an attempt to color the narrative before it's been written.
“Your failure to operate X in a safe and responsible manner does not breed confidence in your ability to safely expand into consumer finance. X has been criticized by policymakers for ‘systemic' issues related to the circulation of child sexual abuse material (CSAM) on its platform, including CSAM images generated by Grok, X’s artificial intelligence chatbot. Minors have also sued xAI after Grok generated pornographic images of them.”
That's a completely fair criticism in my opinion. Adding a financial transaction layer to a platform already riddled with CSAM doesn't feel like a very safe idea. Is Musk about to unintentionally create the world's largest CSAM marketplace?
As many of you know, Elon Musk was the founder of X.com, one of the Internet's original payment systems, which later merged with Confinity's PayPal product and eventually took on the PayPal name. Decades ago, Musk was very much at odds with his partners at PayPal, almost ousted as CEO at one point, and it's been very well documented since then that he always planned to one day build his original vision of a financial platform. He took a few side quests along the way, building electric vehicles, rocket ships, underground tunnels, chips that connect to your brain, and of course buying a social network, but it's interesting to see him follow through on his original X Money vision years later.
Could it be a disruptor to the banking industry? Yes, absolutely. Is that necessarily a bad thing? Maybe not, but that's to be determined.
All I can say today is that there's a huge spread between what banks take in and what they dish out, and the industry is ripe for disruption. X Money could put some much needed pressure on legacy banks to make their financial products more attractive for your average customer. There isn't a hard-and-fast rule that says the rest of us should have to settle for 3.5% on our deposits just because that's the rate banks have decided puts the most money in their own pockets.