An interesting situation is developing around X Money. Elizabeth Warren, known for her criticism of the crypto sector, decided to directly ask Elon Musk questions about the plans for the payment system in X. And judging by the letter she sent, her concerns are serious.

The point is that Warren is worried about the potential risks that integrating stablecoins into a social platform might bring. She is interested in whether X can issue its own stablecoin within the framework of the GENIUS legislation, which specifically allows private companies to do so. But what alarms the senator is that in the beta version of X Money, they already promise 6% on deposits and plan to cooperate with Cross River Bank. And this bank has had issues with the FDIC.

Elizabeth Warren asks a logical question: where do these returns come from if the federal funds rate is currently only 3.5-3.75%? This could indicate risky investments or attempts to monetize data. Additionally, she points out that users may not be aware of a key nuance: their deposits will not be protected by FDIC insurance.

According to FDIC Chairman Travis Hill, who spoke as early as March, stablecoins indeed do not fall under standard deposit insurance. Although legislation theoretically does not prohibit companies from offering extended insurance (up to $250,000 per customer), the FDIC considers this inconsistent with the spirit of the regulatory framework.

Warren’s position reflects a broader skepticism among regulators about technology companies and non-bank institutions issuing cryptocurrency products. This could be the beginning of more serious legislative opposition to such initiatives.