Sen. Elizabeth Warren: 'Meta may be renewing its efforts to establish its own stablecoin'

Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) sent a letter to Meta CEO Mark Zuckerberg to clarify his company’s interest in establishing stablecoin payments across its Facebook, Instagram, and WhatsApp apps. The letter warned that the GENIUS Act included a major loophole that would allow Meta to re-enter the stablecoin space with minimal oversight.

The lawmakers asked Zuckerberg whether his company had any influence on the GENIUS stablecoin bill, raising concerns about Meta’s plans to potentially issue its own stablecoin. The Senate voted 68-30 on Wednesday to advance the GENIUS Act. Warren and Blumenthal stated that if Meta controlled its own stablecoin, the company could further “pry” into consumers’ transactions and commercial activity.

According to the Senators, Meta’s issuing and controlling of a private currency would threaten competition across the economy, erode financial privacy, and cede control of the U.S. money supply to monopolistic platforms that have a history of abusing their power.

They claim taxpayers could find themselves once again on the hook should the company’s stablecoin get approval.

Letter draws connections between Meta’s past failures and current risks

The senators’ letter drew connections between Meta’s past failures and current risks, noting the company’s “troubling record” of operations. The company’s recent exploration of stablecoins marked a comeback attempt following the failure of its Libra project in 2019. Libra collapsed following bipartisan opposition from lawmakers, regulators, and international financial authorities. 

However, Senators Warren and Blumenthal warned that the GENIUS Act included a loophole that would allow Meta to re-enter the stablecoin space with minimal oversight. The company recently hired Ginger Baker, a former fintech executive and crypto organization board member, to steer its stablecoin explorations.

The senators also wanted to know if Meta would oppose amendments prohibiting “Big Tech” companies from controlling stablecoin issuers. They were concerned that the tech company could utilize its 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 $1.7 trillion tech company could consolidate massive economic power and undermine competition.

“By passing the GENIUS Act, the Senate is not only about to bless this corruption, but to actively facilitate its expansion.”

–Elizabeth Warren, Senator of Massachusetts 

Warren and Blumenthal gave Zuckerberg until June 17 to respond to eight detailed questions about Meta’s stablecoin plans, including which companies the tech giant had consulted. They requested more deliberations on his company’s plans to pursue a stablecoin venture once again.

Merkley joins Warren in questioning WLFI’s suspicious stablecoin deals 

Senators Warren of Massachusetts and Jeff Merkley of Oregon jointly stated in a June 10 letter that the launch of a stablecoin directly tied to a sitting President who stood to benefit financially from the stablecoin’s success was an unprecedented conflict of interest, presenting threats to the U.S. financial system and its democracy. 

Merkley and Warren requested financial records related to the $2 billion investment in World Liberty by MGX, an Emirati firm. The Senators also questioned WLFI’s involvement in the business deal by Binance, a crypto exchange controlled by a Singaporean national. The fine print on the WLFI’s website says an entity affiliated with Mr. Trump and his family members owns a 60% stake in the company.

The senators’ request was in response to a letter sent by World Liberty on May 29, in which the company’s lawyers disputed allegations that MGX’s $2 billion investment in Binance through World Liberty Financial improperly benefited the Trump family. However, WLFI’s public reports showed that a Trump family entity, “DT Marks DEFI LLC,” holds 22.5 billion WLF tokens and takes an additional 75% in net revenue from future token purchases.

The letter addressed to the CEOs of Binance and MGX asked both firms to preserve communications between Binance officials, MGX, World Liberty Financial, the White House, and other U.S. federal government agencies. It also requested communications between specific individuals, including President Trump, his sons Barron, Eric and Donald Jr.; Zack and Alex Witkoff, co-founders of World Liberty Financial; and their father, Steve Witkoff, the president’s special envoy to the Middle East.

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