Senators Demand Answers on Meta's Stablecoin Plans Amid Privacy Concerns

Senators Elizabeth Warren and Richard Blumenthal have sent a letter to Meta CEO Mark Zuckerberg, demanding detailed information about the company's plans to integrate stablecoin payments across its platforms. The senators expressed concerns that Meta's involvement in stablecoins could lead to misuse of financial data and consolidation of economic power, potentially undermining competition and eroding financial privacy.

The inquiry follows reports that Meta is in discussions with cryptocurrency firms to integrate stablecoin payments into its platforms, including Instagram, Facebook, and WhatsApp. The senators warned that with Meta's 3.5 billion daily users, the company could consolidate significant economic power and undermine competition.

Meta's exploration of stablecoins marks a comeback attempt following the failure of its Libra project in 2019. The initiative, later renamed Diem, collapsed under intense regulatory scrutiny and bipartisan political opposition before ultimately selling off its assets in 2022. The senators' letter draws connections between Meta's past failures and current risks, noting the company's "troubling record" of operations.

The senators stated that if Meta controlled its own stablecoin, the company could further pry into consumers' transactions and commercial activity. They warned that Meta could utilize the vast amounts of consumer data "to fuel surveillance pricing schemes on its platform, more intrusive targeted advertising, or otherwise help the company monetize sensitive private information through sales to third-party data brokers."

The senators have given Zuckerberg until June 17 to respond to eight detailed questions about Meta's stablecoin plans, including which companies the tech giant has consulted and whether it's considering launching its own token. They also want to know if Meta has lobbied on crypto legislation and whether it would oppose amendments prohibiting “Big Tech” companies from controlling stablecoin issuers.

The investigation comes at a critical juncture as the Senate voted to advance the GENIUS Act, a legislation “that would explicitly allow Big Tech companies like Meta to issue their own stablecoins.” The senators expressed concern that passing the GENIUS Act could facilitate the expansion of Big Tech's control over stablecoins, potentially leading to further consolidation of economic power and erosion of financial privacy.