Senator Elizabeth Warren gave Meta a May 20 deadline to answer 7 questions regarding its stablecoin ambitions, escalating regulatory scrutiny as the Senate considers a comprehensive framework for digital assets.
“It is critical that Meta be transparent with Congress and the public regarding its stablecoin-related plans,” Warren wrote in a letter to CEO Mark Zuckerberg, arguing the firm’s 3.5 billion users create systemic implications.
The inquiry follows reports of Meta testing third-party stablecoin payouts and seeks specifics on partnerships, risk management controls, and data privacy. The move comes as the CLARITY Act, which would establish rules for the U.S. crypto market, remains stalled in the Senate Banking Committee, on which Warren is the ranking member.
Warren's probe re-ignites the battle between Big Tech and regulators over financial services, echoing the strong opposition that crushed Meta's own Libra stablecoin in 2019. The outcome could set a precedent for how large technology platforms are allowed to integrate digital currencies, potentially shaping the competitive landscape for a stablecoin market that has grown to over $303 billion.
Senator Warren’s letter explicitly links her inquiry to upcoming legislative efforts. “It is essential that Congress fully understand the implications of Meta’s stablecoin integration plans as it considers legislation to structure the cryptocurrency market,” she stated.
The CLARITY Act represents one of the most significant pieces of crypto-specific legislation before Congress. After months of delays, a potential compromise was reportedly reached last week that could allow the bill to advance. Warren's letter places Meta's activities directly in the context of this debate, questioning whether the company's sheer scale could allow it to dominate the payment ecosystem and favor a handpicked stablecoin partner, thereby distorting competition before clear rules are in place.
This is not Meta's first foray into digital currency. The company's 2019 announcement of its own private stablecoin, Libra (later renamed Diem), drew immediate and intense backlash from global regulators, who feared a private corporation could usurp monetary control from central banks. The project was ultimately abandoned.
Meta's current strategy appears more cautious, involving a partnership with an existing, regulated stablecoin rather than issuing its own. The company recently began a "small and focused trial" paying select creators in the Philippines and Colombia with Circle's USDC. While Meta has emphasized it is not creating its own currency this time, Warren's letter shows that regulators still view any large-scale integration of crypto into a major tech platform as a potential systemic risk. The Senator is demanding to know what financial arrangements exist between Meta and any stablecoin issuer and what safeguards are in place to prevent illicit finance and protect user data.
This article is for informational purposes only and does not constitute investment advice.
