Elon Musk has been questioned by US Senator Elizabeth Warren about X Money, a payment mechanism that would soon be incorporated into the X social networking platform.
The financial system and US national security may be at risk from X Money’s possible stablecoin and cryptocurrency integrations, according to a letter written on Tuesday by Warren, a long-time opponent of Musk and the cryptocurrency sector.
She questioned whether the platform will also create its own stablecoin under a legislative “carveout” in the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act that allows private entities to issue their own stablecoins.
According to Warren, X Money’s limited beta preview indicates that it will collaborate with Cross River Bank, which was the target of enforcement action by the Federal Deposit Insurance Corporation (FDIC), a banking regulator, and give 6% interest on deposits.
“It is unclear what risky investments, intrusive data monetisation 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%,” she stated.
Warren’s letter may indicate opposition from US politicians to private firms releasing stablecoins under the GENIUS stablecoin legal framework, which permits non-banks and the tech industry to create US dollar-pegged tokens.
Source: X.com
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