Meta's back in the stablecoin game? Seriously? After the Diem debacle, you would think they learned their lesson. Yet here they are, ready to brush off their blockchain dreams, looking to Instagram as their own crypto bank. The question can’t be just “Can they do it?” It's "Should they be allowed to?"

Is Meta Too Big To Fail?

The sheer scale of Meta is terrifying. They're not some scrappy startup disrupting finance. They're a data behemoth with a history of, shall we say, less-than-ideal privacy practices. Do we truly want them controlling an entirely new digital currency that impacts the lives of potentially billions of people?

It's easy to get caught up in the utopian vision of "banking the unbanked," but let's be realistic. Meta's primary motivation isn't altruism; it's profit. Just as importantly, they perceive an opening to bypass Visa, traditional banking infrastructure, and reinforce their control over the emerging digital economy. And honestly, who can blame them?

That's precisely the problem. This kind of unchecked power in the hands of a profit-driven corporation with Meta’s track record should concern anyone. We’re not describing some company new to the misinformation game, we’re describing the parent company of big platforms that notoriously can’t control how hate speech spreads. How can we believe them when they say they’d be able to manage something as sensitive as a digital currency?

The parallels to the 2008 financial crisis writ large are eerily similar. Banks, deemed "too big to fail," took reckless risks with other people's money, knowing they'd be bailed out if things went south. Is Meta setting itself up for a repeat of this situation? What happens if their stablecoin implodes? Will taxpayers be on the hook?

Regulatory Minefield Ahead for Meta?

Make no mistake. That’s not to say that Meta won’t need to moonwalk through a regulatory minefield to get this thing off the ground. As it is, the US has already been critical of stablecoins, considering them to be digital versions of the dollar. They’re going to be under a big microscope from the SEC, the Treasury Department, and maybe even Congress.

We need to ask ourselves is Meta's scale is a competitive advantage or a liability when it comes to regulation. Meta will need money transmitter licenses, strong AML compliance, and, depending on how the stablecoin is structured, could even fall under securities regulations. Now, picture all of that legal backlash, that lobbying muscle, that work to delay the project for years on end.

The ghost of Diem looms large. Yet that project was ultimately strangled by regulatory sword rattling. Why on earth should anyone believe Meta about what will be different this time? Will Ginger Baker’s impish leadership be enough to bend things into shape with doubting regulators? Are the negotiations with Circle and other crypto exchanges just window dressing to make the government look cooperative?

The prospect for regulatory arbitrage is ever-present. Or, as Meta has hinted, they could attempt to establish a presence in a jurisdiction with less strict regulations. That would just open up an additional can of worms and very likely precipitate a new global regulatory clampdown.

Creator Payments or Data Harvesting?

The actual focus on creator payments is a pretty ingenious PR move. It makes Meta look like the savior of the small player, democratizing the influencer economy with speedier, more cost efficient payment pipes. Let's not be naive. Every transaction is a data-friendly data point, and Meta is the undisputed king of data harvesting.

  • Lower Fees: Attractive to creators.
  • Faster Transactions: Convenient for international markets.
  • Data Collection: Extremely valuable to Meta.

Are their subscriptions really intended to help creators, or do they just want to develop a more complete portrait of their users’ financial lives. Will this new data be used to geo-target ads, manipulate behavior through dark patterns, or worse – influence elections?

Consider this: if Meta controls the rails for creator payments, they have unprecedented insight into the creator economy. They know who’s making money, what people are buying, and what type of content is making the most money. That’s a huge treasure trove of information that would provide them an artificial advantage over their actual competitors.

This isn’t only about money — it’s about power. It’s not just that this is about Meta further entrenching itself in more and more aspects of our digital lives. It’s long past time that regulators stepped up and put a line in the sand. By the time Instagram shrinks the world’s largest (and most unregulated) bank.