US Senators Demand Clarity on Meta’s Stablecoin Strategy
US Senators Elizabeth Warren and Richard Blumenthal have reached out to Meta, the parent company of Facebook, seeking clarification on its potential plans to launch a stablecoin. In a letter dated June 11, the senators expressed their concerns regarding Meta’s intentions, especially in light of the company’s vast global user base and the upcoming vote on the GENIUS Act, which focuses on stablecoin regulations. The inquiry follows a report suggesting that Meta is exploring stablecoins for cost-effective cross-border payments.
Concerns Over Financial Privacy and Competition
The letter from Senators Warren and Blumenthal highlights significant concerns regarding the implications of Meta controlling its own stablecoin. They referenced the company’s previous attempt to launch a private currency in 2019, known as the Libra project, which faced substantial bipartisan and international backlash. The senators warned that if Meta were to issue a stablecoin, it could lead to increased scrutiny of consumers’ financial transactions and commercial activities. They emphasized the potential threats to financial privacy and competition posed by major tech companies entering the realm of private currencies.
The senators pointed out that the rise of stablecoins could create a trend where large technology firms dominate the financial landscape, raising alarms about the impact on smaller businesses and the overall economy. They urged Meta to be transparent about its intentions and the potential consequences of its actions in the cryptocurrency space.
Specific Questions for Meta
In their correspondence, the senators outlined several specific questions for Meta to address. They requested a list of stablecoin companies that Meta may have consulted with since January 1, 2025, as well as clarification on whether the company plans to issue and control its own stablecoin or partner with an existing stablecoin provider. Currently, Circle and Tether are recognized as the leading stablecoin companies, with others like PayPal and Ripple also entering the market.
Additionally, the senators asked Meta to confirm whether it has engaged in lobbying efforts related to cryptocurrency legislation and if it has provided any feedback on the GENIUS Act. They also inquired whether Meta would oppose an amendment to the GENIUS Act that seeks to prevent Big Tech firms from owning or managing stablecoin issuers. Meta has until June 17 to respond to these inquiries.
Warren’s Stance on Stablecoins
Senator Warren has been vocal about her opposition to the issuance of stablecoins by large tech companies. Stablecoins are digital assets pegged to reserve assets like fiat currencies, and USD-pegged stablecoins maintain a 1:1 value ratio with the U.S. dollar. Warren has expressed concerns that if Big Tech firms create their own versions of the U.S. dollar, it could restrict access to payment systems for small businesses.
In a recent interview, she emphasized the need for the GENIUS Act to prohibit large tech companies from issuing their own fiat currencies, arguing that such actions would grant them unprecedented access to the financial behaviors of individuals worldwide. Warren highlighted the risks associated with stablecoins, including money laundering, consumer protection issues, and national security threats, particularly when managed by companies with questionable compliance histories.
As the GENIUS Act awaits final approval from the House of Senate, the proposed legislation has already received backing from the House Financial Services Committee, indicating a growing concern among lawmakers regarding the influence of tech giants in the financial sector.
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