Sen. Elizabeth Warren (D-Mass.) publicly questioned Elon Musk’s 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.

Warren, the Senate Banking Committee ranking member, is pressing 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.

Cross River Bank’s Rap Sheet

Warren’s 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.

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.

Warren also cited a Tech Transparency Project report that X allowed individuals affiliated with Hezbollah and Houthi officials to pay for Premium subscriptions.

The letter additionally pointed to Musk’s 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.

Polymarket Fades The Launch

The Polymarket contract 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.

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:V) and a metal debit card with cashback.

What Traders Are Watching

Mizuho downgraded PayPal Holdings (NASDAQ:PYPL) to neutral last week, saying Venmo faces the most direct substitution risk from X Money targeting the same peer-to-peer entry points.

A failed April launch may ease that overhang on PYPL in the near term. The Mizuho thesis only has teeth if Musk actually ships.

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