A week after the Patent and Trademark Office paved the way for one of Meta’s digital currency software proposals, Congresswoman Maxine Waters (D-Calif.) sent a letter to CEO Mark Zuckerberg and COO Javier Olivan questioning the firm’s intentions.
“With its initial filings on March 18, 2022, Meta’s application submissions as of January 22 appear to represent a continued intention to expand the company’s involvement in the digital assets ecosystem,” reads the letter sent on Jan. 22.
Does the company have a new plan for crypto? Meta didn’t immediately respond to a request for comment from Fortune.
In the past year, Meta has submitted five applications for trademarks related to cryptocurrency or blockchain. Waters implied that these trademarks contradict communications between the Democratic Financial Services committee and Meta staff. According to her letter, representatives of Meta stated that the company is not pursuing any developments related to digital assets or the blockchain. The congresswoman now seeks clarification.
This is not the first time that Waters, the ranking member of the House Committee on Financial Services, has clashed with executives at Meta, formerly Facebook. In June 2019, the company announced plans to create a stablecoin—a cryptocurrency that’s typically tied to a reserve, such as the U.S. dollar—and a wallet service, originally named Libra and Calibra, respectively.
“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending 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 protections for investors, consumers, and the economy.”
Nevertheless, Meta forged ahead, later rebranding the project as Diem, selecting Switzerland for the headquarters of Diem Association, the company that managed the coin. Waters, for her part, continued to monitor the development, holding congressional hearings and even flying to Switzerland to meet with government officials.
Waters wasn’t alone in looking into Diem or, for that matter, stablecoins, for which the U.S. still has no clear legislation. A November 2021 report issued by the President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency included concerns about such a concentration of power in one company that’s producing both the stablecoin and its related wallet.
“This combination could have detrimental effects on competition and lead to market concentration in sectors of the real economy,” the report said. “A stablecoin that becomes widely adopted as a means of payment could present concerns about anti-competitive effects.”
The Diem Association had tried for more than two years to find a viable path with regulators both in the U.S. and abroad, but almost three months after that report came out, the organization folded. All assets and intellectual property were acquired by Silvergate, a California-based bank that provides crypto-related services.
After announcing the end of operations, Diem CEO Stuart Levey argued that the company had received mixed messages from regulators. In a statement, Diem insisted that regulators viewed the stablecoin project as innovative and well-designed, arguing that changes were implemented in accordance with regulators’ concerns.
“Despite giving us positive substantive feedback on the design of the network,” Levey said in January 2022, “it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead.”
