Sen. Elizabeth Warren (D-Mass.) publicly questioned Elon Musk\u2019s fitness to run X Money, one day before her deadline for Musk to respond to an April 14 letter flagging consumer, financial stability and national security risks.<\/p>\n
Warren, the Senate Banking Committee ranking member, is pressing<\/a> Musk on whether X Money will issue a stablecoin, whether it will surveil and monetize user transaction data, and what controls it will have to prevent scams, fraud and illicit finance<\/a>.<\/p>\n Cross River Bank\u2019s Rap Sheet<\/p>\n Warren\u2019s letter flagged that X Money deposits appear to be held by Cross River Bank, based on screenshots posted by actor William Shatner, who received early access.<\/p>\n The 6% APY headline feature is offered through the same bank. Cross River is a repeat FDIC enforcement target, hit with a 2023 action tied to fair lending concerns and a separate 2018 action over consumer deception, according to the letter.<\/p>\n Warren also cited a Tech Transparency Project report that X allowed individuals affiliated with Hezbollah and Houthi officials to pay for Premium subscriptions.<\/p>\n The letter additionally pointed to Musk\u2019s role in dismantling the Consumer Financial Protection Bureau, which finalized a 2024 rule to oversee digital payment apps like X Money. Musk, Warren wrote, stood to gain from its collapse.<\/p>\n Polymarket Fades The Launch<\/p>\n The Polymarket contract<\/a> on X Money launching publicly by April 30 is trading at 31%, down from over 60% in late March. Resolution rules require open public access. Closed beta and invite-only access do not count.<\/p>\n Musk said in a March 10 post that early public access would launch this month. The product offers peer-to-peer transfers via Visa Inc. (NYSE:<\/a>V<\/a>) and a metal debit card with cashback.<\/p>\n What Traders Are Watching<\/p>\n Mizuho downgraded PayPal Holdings (NASDAQ:<\/a>PYPL<\/a>) to neutral last week, saying Venmo faces the most direct substitution risk from X Money targeting the same peer-to-peer entry points.<\/p>\n A failed April launch may ease that overhang on PYPL in the near term. The Mizuho thesis only has teeth if Musk actually ships.<\/p>\n Image: Shutterstock<\/p>\n