WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy, issued the following statement in connection with Better Markets’ new Fact Sheet, “Facebook’s Libra Stablecoin Warning for Any Stablecoin Legislation,” released ahead of a House Financial Services Committee hearing entitled “Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and Consequences of a U.S. Central Bank Digital Currency”:
“Tomorrow, Congress will hold a hearing concerning so-called stablecoins, a crypto asset that has proven to be anything but stable. As Congress considers stablecoin legislation, it should remember the fears that were raised the first time it encountered stablecoins. Congress first encountered stablecoins when Facebook (now Meta) wanted to launch a stablecoin called Libra. The possibility of a tech company with the size and reach of Facebook issuing a stablecoin led to bipartisan condemnation. Congress should heed the concerns that were raised about Libra as it embarks on a regulatory framework for stablecoins.
“Politicians from across the political spectrum raised concerns about a huge tech company acting like a bank without being regulated like one; about the excessive concentration of economic power that could result, and about the potential threat to financial stability. Yet less than five years after these concerns led to the demise of Facebook’s Libra project, Congress is now considering legislation that would allow Big Tech to issue stablecoins. This despite the fact that concerns about the size and power of technology companies have only grown.
“As our fact sheet shows, Facebook faced concerns that Libra was an attempt by the private sector to usurp authority over money, one that would lead to a financial crisis. Facebook was not able to alleviate these concerns. Congress should not act on any stablecoin legislation that does not sufficiently address these concerns and protect the public.”
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