Congresswoman Maxine Waters has questions for Meta. Amy Sussman – Getty Images
A week after the Patent and Trademark Office cleared the way for one of Meta's cryptocurrency software proposals, Congresswoman Maxine Waters (D-CA) sent a letter to CEO Mark Zuckerberg and COO Javier Olivan questioning the company's intentions.
“From initial filings on March 18, 2022, the meta requests as of January 22 appear to represent a continued intention to expand the company’s involvement in the digital assets ecosystem,” the letter sent on January 22 reads.
Does the company have a new plan for cryptocurrencies? Meta did not immediately respond to a request for comment from luck.
Last year, Meta filed five trademark applications related to cryptocurrencies or blockchain. Waters noted that these trademarks conflict with communications between the Democratic Financial Services Committee and Meta staff. According to its letter, Meta representatives stated that the company is not following any developments related to digital assets or blockchain. The congresswoman is now seeking clarification.
This is not the first time Waters, the ranking member of the House Financial Services Committee, has clashed with executives at Meta, formerly Facebook. In June 2019, the company announced plans to create a stablecoin — a cryptocurrency typically tied to a reserve, such as the US dollar — and a wallet service, originally called Libra and Calibra, respectively.
“With the announcement of its plans to create a cryptocurrency, Facebook continues to expand unchecked and expand its reach into the lives of its users,” Waters said in a 2019 statement. “The cryptocurrency market currently lacks a clear regulatory framework to provide strong protection for investors, consumers, and the economy.”
However, Meta went ahead, later renaming the project as Diem, and choosing Switzerland as the headquarters of the Diem Association, the company that managed the currency. For her part, Waters continued to monitor developments, held congressional hearings, and even traveled to Switzerland to meet with government officials.
Waters was not alone in considering the issue of Diem or stablecoins, for which there is still no clear legislation in the United States. A November 2021 report from the President's Task Force on Financial Markets, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency included concerns about the concentration of power in a single company that produces both the stablecoin and its associated wallet.
“This combination could have adverse effects on competition and lead to market concentration in sectors of the real economy,” the report said. “A stablecoin that is widely adopted as a means of payment could raise concerns about anti-competitive effects.”
The DEM Association has tried for more than two years to find a viable path with regulators in the United States and abroad, but roughly three months after this report was released, the organization has collapsed. All assets and intellectual property were acquired by Silvergate, a California-based bank that provides cryptocurrency-related services.
After announcing the end of operations, Diem CEO Stuart Levy said the company received mixed messages from regulators. In a statement, Diem insisted that regulators view the stablecoin project as innovative and well-designed, arguing that changes were implemented in accordance with regulators' concerns.
“Despite giving positive objective feedback on the network design, it became clear from our dialogue with federal regulators that the project could not move forward,” Levy said in January 2022.
