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Senators in the U.S. Investigate Stablecoin Ambitions by Meta's Corporation (Facebook's Parent Company)
Hammering the High-Tech Titan: stablecoins under the microscope
Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) aren't holding back on tech giant Meta, firing off a pointed letter to CEO Mark Zuckerberg over the company's renewed interest in stablecoin payments.
"Big Tech companies fiddling with their own private digital coins, like stablecoins, could jeopardize competition, pillage financial privacy, and let these behemoths control the U.S. money supply," the senators wrote bluntly in the letter.
With Meta's 3.5 billion daily users, the senators sounded the alarm on the potential for the company to consolidate a substantial portion of the economic pie and squash competition.
The Senate's probe follows a Fortunereport that Meta's in talks with crypto companies regarding stablecoin integration across platforms such as Instagram, Facebook, and WhatsApp.
Meta's rekindled interest in stablecoins comes after the collapse of its Libra project in 2019 - later renamed Diem. The endeavor fell apart under severe regulatory scrutiny and political opposition, ultimately offloading its assets in 2022.
Unchecked power
The senators' letter makes a connection between Meta's past missteps and current threats, highlighting the company's "troublesome track record" of operations. The letter cautioned that if Meta controlled its own stablecoin, "the company could poke its nose into users' transactions and commercial activity."
No holds barred, stablecoins are cryptocurrencies pegged to the value of traditional assets like the U.S. dollar, boasting price stability, and primarily used for payments and transfers. The senators suggested that Meta could use the extensive amounts of consumer data to fuel aggressive pricing schemes, intrusive targeted advertising, or monetize sensitive private information through third-party data broker sales.
Given tight deadlines, Zuckerberg has until June 17th to answer eight detailed questions regarding Meta's stablecoin plans, including which firms the tech titan has consulted and whether it's eyeing a self-contained token.
The senators also want to know if Meta has lobbied on crypto legislation and would stand in the way of amendments barring "Big Tech" companies from controlling stablecoin issuers.
The investigation comes at an opportune moment as the Senate voted 68-30 on Wednesday to advance the GENIUS Act, legislation supposedly permitting Big Tech companies to issue their own stablecoins.
"By giving the GENIUS Act a green light, the Senate is not just green-lighting this corruption but actively engineering its expansion," Warren said bluntly on the Senate floor. This refers to President Donald Trump's ties with his family-backed crypto platform World Liberty Financial.
NGC has reached out to Meta for comment, and previously, communications director Andy Stone jotted on X in May that there was "no Meta stablecoin" in the works.
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Senate Investigation:
- Despite Meta's public claims of no stablecoin development, rumors circulate around potential stablecoin integration with firms like Circle and Tether.
- Senators Elizabeth Warren and Richard Blumenthal have requested clarification on Meta's stablecoin plans, highlighting concerns about privacy and financial risks.
GENIUS Act:
- If passed, the GENIUS Act could potentially give Meta an edge over other stablecoin issuers by waiving certain crypto regulations.
- The bill's progress suggests it may pass without significant alterations, which could impact Meta's future stablecoin involvement.
- Senators express concerns that Meta controlling its own stablecoin could enhance surveillance capabilities and further consolidate its data dominance.
- Senator Elizabeth Warren wrote bluntly in the letter that Big Tech companies, like Meta, creating their own digital coins, such as stablecoins, could endanger competition, infringe on financial privacy, and allow these companies to control the U.S. money supply.
- Stablecoins, cryptocurrencies pegged to the value of traditional assets, are primary for payments and transfers and have been boosting in popularity in the business and technology world.
- Meta, under senatorial scrutiny, has until June 17th to respond to eight detailed questions about its stablecoin plans, including which firms it has consulted and whether it's aiming for a self-contained token.
- In a recent vote, the Senate advanced the GENIUS Act, a potential legislation that would allow Big Tech companies to issue their own stablecoins, raising concerns about expanded surveillance capabilities and data dominance for these companies.
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