Meta Platforms Inc. is said to be considering a comeback to the stablecoin market, three years after it cut off its Diem venture. This is drawing major political pushback, specifically from Senator Elizabeth Warren, who is pushing for tighter regulation to block leading tech firms from launching digital currencies.
Meta’s Return to Stablecoins
Meta is engaged in talks with several cryptocurrency companies to possibly roll out stablecoins on its platforms, to ease cross-border payment for content publishers and lower fees. In a departure from the earlier effort, Meta is even contemplating collaborating with existing stablecoin issuers as opposed to coming up with an in-house virtual currency. To spearhead the initiative, Meta has hired Ginger Baker, erstwhile executive of Plaid and Ripple, to be Vice President of Product.
This strategic move is made at a time when there is increasing interest in stablecoins in the financial sector, with firms such as Ripple, Mastercard, and Visa venturing into similar initiatives. Standard Chartered has estimated that the market for stablecoins may grow by $2 trillion by 2028.
Legislative Pushback and the GENIUS Act
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which aims to establish a regulatory framework for stablecoins, has faced challenges in the Senate. Senator Warren and fellow Democrats have complained that the bill does not have adequate protection against possible misuse by big businesses and political leaders. They urge amendments to prevent elected officials and large technology firms from owning or sponsoring stablecoin businesses.
The bill’s passage was also complicated by revelations of President Trump’s participation in cryptocurrency projects, such as the launch of a meme coin and involvement with a stablecoin project tied to substantial foreign investments. These events have amplified demands for tighter regulations to avoid conflicts of interest and provide financial stability.
Senator Warren has put a focus on full consumer protections, anti-money laundering controls, and limits on foreign issuers in the GENIUS Act. In her opinion, if these provisions are not included, the bill can allow undue control of the financial system by powerful players.
Also read: Crypto Market Surges Past $100K: Key Drivers and Top Altcoin Picks
