Senators Question Meta on Stablecoin Plans Amid GENIUS Act Vote

Two Democratic senators, Elizabeth Warren and Richard Blumenthal, have sent a letter to Meta CEO Mark Zuckerberg, questioning the company's potential plans to introduce another stablecoin. This inquiry comes as the US Senate is poised to vote on the GENIUS Act, a legislation aimed at regulating payment stablecoins. The senators expressed concern about the size of Meta and the potential impact of its stablecoin plans on consumers and the broader financial system.

The senators asked Zuckerberg to provide information on any companies Meta may have consulted regarding stablecoins and any influence it may have had on the stablecoin bill in the Senate. They also raised concerns about Meta's previous stablecoin projects, Libra and Diem, which were shut down due to widespread opposition from international regulators. The senators expressed worry that if Meta controlled its own stablecoin, it could further pry into consumers’ transactions and commercial activity, potentially leading to surveillance pricing schemes, more intrusive targeted advertising, or the monetization of sensitive private information through sales to third-party data brokers.

The letter follows reports suggesting that Meta is exploring the integration of stablecoin payments into its platforms, which include Facebook, Instagram, Threads, Messenger, and WhatsApp. However, it remains unclear whether Meta intends to use stablecoins from issuers like Tether or Circle, or pursue its own project.

The senators' questions to Zuckerberg highlight the growing regulatory pressure on tech giants and their involvement in the cryptocurrency space. The GENIUS Act, if passed, would impose strict regulations on stablecoins, requiring providers to adhere to certain standards and undergo regular audits. The legislation aims to address concerns about the stability and transparency of stablecoins, which are often used as a medium of exchange in the cryptocurrency market.

The debate surrounding the GENIUS Act has intensified partisan tensions, with some lawmakers expressing support for the legislation while others argue that it could stifle innovation in the cryptocurrency industry. The scrutiny of stablecoins and the debate over the GENIUS Act reflect a broader effort by lawmakers to address concerns about the potential impact of stablecoins on the broader financial system and ensure that the cryptocurrency market operates in a safe and transparent manner.