A promise of 6% returns on deposits from a crypto-linked payments platform is raising red flags in Washington — and one senator wants answers.
Warren Zeroes In On The NumbersThe math doesn’t add up, according to Sen. Elizabeth Warren. With the federal funds rate sitting between 3.5% and 3.75%, X Money’s advertised 6% yield on deposits struck the Massachusetts Democrat as suspicious enough to put in writing.
X Money is a payments feature being built into the X social media platform. A limited beta preview has already gone out, giving Warren enough to work with.
She named Cross River Bank, X Money’s listed partner, as a point of concern. The bank has previously faced enforcement action from the Federal Deposit Insurance Corporation.
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At the center of her concern is a provision in the Guiding and Establishing National Innovation for US Stablecoins Act — better known as the GENIUS Act. That legislation allows private companies, including non-bank entities, to issue their own dollar-backed tokens.
Hill noted the law doesn’t explicitly block pass-through insurance coverage, which would extend FDIC protection to individual users up to $250,000 in the event of a company failure. But he said allowing that would contradict the framework’s broader intent.
Warren’s letter asked whether X Money customers would be clearly informed that their funds carry no federal backstop. It’s a basic consumer question — one that hasn’t been publicly answered.
Musk has not yet responded to the letter.
Featured image from IndieHackers, chart from TradingView
