Three years after abandoning its previous effort to produce a stablecoin, Meta is now working with several cryptocurrency companies to introduce a new version of the digital currency.
The company plans to use the stablecoin for cross-border payments, simplifying payouts to the creators who use its platforms around the world. Not only will this make it easier for Meta to pay everyone in a single currency, but it would also allow the company to avoid the processing fees typically charged for payment modes like wire transfers.
That makes sense, given that much of Meta’s expenses consist of numerous small payments to contributors. Some reports suggest that Meta may integrate the stablecoin with Instagram, allowing it to pay creators up to $100 per transaction.
Regulatory Concerns
Meta’s entry into the crypto space began in 2019 with its Libra project, initially aimed at developing a stablecoin—later renamed Diem—to facilitate global payments. However, the initiative was scrapped in 2022, reportedly due to heavy regulatory pressure from the Biden administration.
Following the company’s announcement of the sale of its crypto assets, Diem CEO Stewart Levey noted: “Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead.”
A More Welcoming Environment
The current landscape is much more welcoming to the idea. For one thing, the Trump administration has been more favorable toward the crypto industry than Biden was.
“It mainly comes down to the pro-crypto regulatory environment,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Two stablecoin bills are going through the House and Senate right now, with likely more coming down the pipe.”
As a result, stablecoins are having a moment, with several major financial players entering the market. Tether and Circle remain the leaders in the space, but JPMorgan Chase, Mastercard, Visa, and PayPal are all offering stablecoin programs of various kinds.
“Whether Meta decides to build and issue their own or partner with someone like Circle is yet to be determined,” said Hugentobler. “But tech providers, financial institutions and other companies of all types are realizing the benefits of stablecoins for digital payments and the efficiencies they offer.”
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