Meta (formerly Facebook) is getting back into crypto
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Markets and investment trends tend to move in cycles, and the cryptoasset sector is no exception to this rule of the marketplace. As TradFi institutions continue to deploy blockchain affiliated projects, including the launch of a stablecoin by SocGen running on the Ethereum blockchain, the adoption and acceleration of cryptoassets continues virtually unabated. Even as the sentiment toward crypto improves, prices of bitcoin and other cryptocurrencies increase, and the policy landscape pivots toward a pro-growth outlook there remain significant obstacles to mainstream utilization. For example, the tax treatment of crypto is an inhibitor to retail utilization of crypto as a method of payment, and the lack of insurance available for crypto and crypto-adjacent products can make it difficult for institutions to allocate substantial funds to cryptoassets.
Against this landscape, exemplified both the increasing adoption and understanding of cryptoassets and applications with the continued limitations to institutional usage, one company stands apart for several reasons. Meta (formerly Facebook) recently has been questioned by Senators Warren and Blumenthal related to its support for the GENIUS Act, and specifically whether or not the firm would block a prohibition on Big Tech firms from owning stablecoin issuers. The specifics of the questioning by the senators will most assuredly change over time, but the letter that has been made publicly available detail that the senators desire specifics as to what the stablecoin plans for Meta are.
Let’s take a look at why this letter and these questions are important, not only for Meta, but for the cryptoasset marketplace at large.
Meta Might Repeat Facebook Failures
Meta, then operating as Facebook, already attempted to launch of a native stablecoin in 2019 via the Libra project which was subsequently rebranded as Diem. This previous effort occurred during an entirely different economic and policy landscape, and occurred as the organization was still contending with intense scrutiny following the 2016 U.S. Presidential election. Issues that were raised at the time dealt with the potential of a stablecoin issued by Facebook serving to weaken competition, compromise user privacy, and lead to continued fractionalization of which entity or organization sets policy for U.S. monetary and fiscal policy.
While the cryptoasset landscape and policy outlook for crypto projects has definitively shifted to a more permissive stance the very same issues that were raised during 2019 loom large as Meta returns to the stablecoin marketplace. Specifically, the letter from the Senators cited the track record of privacy violations, scams, and fake news that continue to occur on the platform as risks that a native stablecoin could amplify.
Even as stablecoins increasingly become more mainstream, and are approaching a market capitalization nearing $300 billion, Meta might find many of the same issues that stymied earlier efforts being dragged back to the surface.
Crypto Native Issuers Might Gain An Advantage
Since Meta is one of the few returning players to the stablecoin space this provides an opportunity for crypto native stablecoins such as Circle, which continues to ride high following its IPO in June. As Meta edges closer to launching its own stablecoin, the spotlight on Big Tech’s role in digital money is about to get a lot brighter, especially as these same tech firms continue to invest billions in AI initiatives. For crypto-native firms like Circle, that’s not a threat – it’s an opportunity. Meta’s sheer size and complicated history with data privacy all but guarantee it will draw intense regulatory scrutiny. And that scrutiny will set a new bar for how stablecoins are viewed and governed both in the U.S. and abroad.
That’s where Circle can shine. Unlike tech giants pivoting into payments, Circle was built in crypto — with regulatory engagement and transparency as core pillars. While Meta faces inevitable trust questions and regulatory hurdles, Circle can double down on its position as the safer, more compliant alternative. In the coming months, expect firms like Circle to lean into this advantage, especially as institutional partners and consumers alike grow more cautious about Big Tech controlling their money. Notably, the ongoing partnership between Circle and Coinbase – two of the largest crypto native firms that are publicly traded in the U.S. – can also serve to assuage concerns of policymakers.
Meta’s Efforts Highlight The Need For Transparent and Audit
Regardless of this specific stablecoin project plays out the following reality is becoming increasingly clear, and some would say urgent, for the crypto marketplace. With tens of billions flowing into the sector, TradFi firms deploying blockchain based solutions and native stablecoins, and policymakers actively debating the GENIUS Act, the crypto audit and attestation narrative continues to seem stuck. While the AICPA continues to issue guidance and updates related to digital asset attestation, controls, and valuation, the authoritative standard setters remain behind the proverbial curve. As stablecoins become more important and integrated with payment, treasury, and lending systems the urgency for definitive and standardized auditing best practices will continue to elevate in importance.
