A new chapter in the digital currency revolution is unfolding in Washington—and it may give Silicon Valley unprecedented power over the future of money.
On Wednesday, the STABLE Act—legislation to regulate stablecoins—cleared the House Financial Services Committee, increasing the chances that Congress will pass a law this year legitimizing stablecoins as a key part of the U.S. financial system. Supporters tout stablecoins as a tool to preserve the dominance of the U.S. dollar, reduce transaction costs, and broaden access to digital payments globally. But beneath the surface, critics say this legislation could open the floodgates for Big Tech to move into banking—and never look back.
At the heart of the controversy is a loophole: under both the House’s STABLE Act and the Senate’s GENIUS Act, non-financial companies could issue their own stablecoins through subsidiaries, provided they receive regulatory approval. That means companies like Meta, Amazon, and Elon Musk’s X could potentially become private money creators—without the traditional guardrails separating commerce from banking.
“This is being framed as a crypto bill, but its biggest beneficiary may be Big Tech,” warns Hilary Allen, law professor at American University and prominent crypto critic. Allen argues that tech giants hungry for payment data will use stablecoins to expand their reach, mine financial behavior, and monopolize consumer markets.
The concern is not hypothetical. Musk’s X has already secured money transmitter licenses in multiple states. Facebook’s earlier Libra project tried to launch a global digital currency before being shot down by regulators. Now, critics say this legislation could let those ambitions resurface, legally.
Imagine Amazon rolling out its own stablecoin—usable for Whole Foods groceries, online purchases, and even subscriptions to the Washington Post. With enough scale, users might choose AmazonCoin over their traditional bank account. But while banks reinvest deposits into the economy through loans, stablecoin reserves are often held in low-risk, static instruments. “That’s money no longer fueling growth,” says Allen.
Rep. Stephen Lynch (D-MA) echoed this concern, warning that the shift could “undermine the ability of banks to make loans to consumers and main street businesses.” Meanwhile, Rep. Maxine Waters pushed for an amendment to maintain the firewall between commercial companies and financial services—a principle deeply rooted in U.S. banking law. The amendment failed, with Republicans defending the need to avoid “stifling innovation.”
Beyond economic implications, there are privacy and regulatory risks. CFPB Director Rohit Chopra previously warned that tech companies in control of financial systems would have the incentive to track all user transactions and tailor pricing based on behavior—essentially weaponizing data against consumers. China’s experience with Tencent and Alibaba dominating payments, only to be reined in by the state, offers a cautionary parallel.
Despite these concerns, momentum is building. With both chambers having passed versions of stablecoin legislation out of committee, Congress now faces the task of reconciling the bills and potentially putting one on President Trump’s desk by summer. Several major banks are reportedly preparing to launch their own stablecoins if the law passes—but they may not be alone.
“This bill could unlock a Pandora’s box,” says Arthur Wilmarth, banking law expert and professor emeritus at George Washington University. “Once Big Tech enters banking, we may never be able to draw that line again.”