Potential Elon Musk Stablecoin Sparks Bipartisan Concerns, Maxine Water Terms It 'A Frightening Proposition'

Lawmakers are expressing concerns that proposed stablecoin legislation, set to pass the House Financial Services Committee, could inadvertently pave the way for tech moguls like Elon Musk to issue their own stablecoins. 

What Happened:  During a markup of the bill, Rep. Maxine Waters (D-Calif.), the committee’s ranking Democrat, expressed her worries about the legislation potentially enabling Musk’s company to issue a stablecoin. 

She referred to this scenario as “a frightening proposition.” Musk’s vision for Twitter X goes beyond being a microblogging platform, as he aims to transform it into a comprehensive communication and financial hub. The potential integration of stablecoin issuance aligns with his broader ambition to create a “global marketplace for ideas, goods, services, and opportunities.”

The legislation aims to regulate stablecoins, a type of cryptocurrency designed to maintain a stable value relative to the U.S. dollar.

Criticism of the legislation also came from Republicans. "Right now this bill contains no commercial entity prohibition," said Rep. Ralph Norman (R-S.C.).

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Why It Matters:  Tech giant Meta, formerly known as Facebook, faced significant challenges with its cryptocurrency project, Diem, leading to its eventual discontinuation. Originally launched as Libra in 2019, Diem aimed to establish itself as a stablecoin. 

However, due to persistent opposition from regulators and a series of setbacks, Meta made the decision to shelve the project.

Price Action: At the time of writing, Bitcoin BTC/USD was trading at $29,257, down 0.21% in the last 24 hours, according to Benzinga Pro.

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