On Wednesday, a stablecoin bill called the STABLE Act advanced through the House Financial Services Committee, increasing the likelihood that Congress will pass a law this year cementing stablecoins’ as a global financial tool. Proponents argue that stablecoins help the U.S. preserve the global centrality of the dollar, while allowing people worldwide to transact more freely, cheaply and securely.
But while stablecoin legislation has received bipartisan support, it has also faced targeted pushback, particularly from Democrats concerned about systemic risks and conflict of interest—especially since the Trump family’s crypto company announced the creation of its own stablecoin. Critics also warn of another potentially significant side effect: that such legislation could open the door for Big Tech players like Meta, X, and Amazon to create their own privatized forms of money, further consolidating corporate power.
“This is being framed as a crypto bill, and in some ways it is. But it has not reached most people’s radar that its biggest beneficiary is likely to be large tech platforms,” says Hilary Allen, a professor at American University Washington College of Law and a vocal crypto skeptic in D.C.
Read More: What are Stablecoins?
Both the House and Senate have passed stablecoin bills—the STABLE and GENIUS Acts, respectively—out of committee. The bills lay out guidelines for how stablecoins will be regulated, and the amount and types of reserves stablecoin issuers must have on hand. The House and Senate will now have the opportunity to reconcile the two bills in the hopes of getting a unified bill onto President Trump’s desk by the summer. Several banks, including Bank of America, have expressed interest in launching their own stablecoin, should a law pass.
But under the current language of the two bills, non-financial companies would also be able to create their own stablecoins via subsidiaries. While previously proposed stablecoin bills prohibited non-banking companies from doing so, neither the STABLE nor the GENIUS Act contain such a provision. In fact, the STABLE Act says that any nonbank can issue a stablecoin as long as they acquire approval from a federal regulator.
Allen says that this would open the door for Big Tech moguls like Elon Musk and Mark Zuckerberg to create their own stablecoins. Both have long been interested in the payments sector—Musk’s X has acquired money transmitter licenses in many states, while Facebook tried to launch its own cryptocurrency, Libra, in 2019 before facing stiff criticism and regulatory scrutiny.
“These big tech platforms have been very interested in doing payments because they’re in the data collection and monetization business—and payments data is particularly valuable because it shows what you’re actually buying,” Allen says. “The more people’s transactions migrate onto these big tech platforms, that will really beef up what are already incredibly systemically important actors in our society, and put them at the center of our financial system.”
Allen lays out a hypothetical scenario in which Amazon issues stablecoins. They could then conceivably scale its usage among Amazon employees and users, Whole Foods shoppers, and Washington Post subscribers, to the point that many people start relying on stablecoins as opposed to bank accounts. “That’s really bad news, because banks take the money deposited with them and loan them out into the economy, while stablecoin reserves just sit there,” Allen says. “So money that had been used productively in our economy is now just sitting with Amazon.”
Stephen Lynch, a Massachusetts Democrat, made a similar point at the STABLE bill’s markup on Wednesday, warning his colleagues that stablecoins would “compete with bank deposits and undermine the ability of banks to make loans to consumers and main street businesses.”
In October 2023, Rohit Chopra, director of the Consumer Financial Protection Bureau under President Biden, warned that if Big Tech firms assumed control of banking operations, they would “have a strong incentive to surveil all aspects of a consumer’s transactions.” He added that they could also develop personalized pricing algorithms.
Arthur Wilmarth, a professor emeritus at George Washington University Law School, tells TIME that people paying for goods with stablecoins would lack fraud protection. He also points to China as a cautionary tale, where Tencent and Alibaba became dominant payments players and gained undue influence over regulators—which then led Beijing to tighten its grip and gain sway over those businesses’ decisionmaking.
At the markup on Wednesday, Rep. Maxine Waters pushed for an amendment that would maintain the separation of commerce and banking, claiming that the bill as written could enable Elon Musk, Walmart, and others to create their own currencies. Wisconsin Republican Bryan Steil, a co-writer of the bill, responded that the amendment would lead to a “stifling of innovation.” Co-writer French Hill, a Republican from Arkansas and the House Financial Services Committee Chair, said that he hoped Congress could work out a “thoughtful solution” to Waters’ concerns while considering a larger crypto market structure bill. The amendment was then rejected.
“I view this stablecoin legislation as presenting a very dangerous opening for big tech to get into banking in a big way,” Wilmarth says. “Once that happens, I think it will be almost impossible to ever close the door again.”
