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Facebook’s Novi Project Under Immediate Scrutiny by U.S. Senators
Just hours after launching its new crypto wallet, five Senators have already requested the immediate discontinuation of Facebook’s crypto project, Novi.
The Novi pilot launched in the United States and Guatemala on Tuesday, October 19 in partnership with cryptocurrency platform Coinbase providing the custody services. The trial includes users to test out acquisitions and transactions of Paxos Dollars (USDP) through their Novi account.
Renowned crypto skeptic Senator Elizabeth Warren was one of the five calling on Facebook CEO Mark Zuckerberg to “immediately discontinue” the project. The five Democrat Senators stated in the letter on October 19:
“Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded ‘Diem’ and ‘Novi,’ respectively.”
The letter came from the office of Senator Brian Schatz and was co-signed by Tina Smith, Richard Blumenthal, banking committee chair Sherrod Brown, and Elizabeth Warren.
The five warned that Facebook has made it a conscious habit to “harm its users and the broader society” and said:
“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.”
Facebook intends to migrate Novi to its Diem payment network, once it gets the approval it needs from regulators. However, early signs show serious opposition can be expected. Earlier this year, the social media platform announced it is working on building its own virtual world.
Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the @Novi digital wallet app in two countries — the US and Guatemala. People can send and receive money instantly, securely, and with no fees. 1/8
— David Marcus (@davidmarcus) October 19, 2021
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Author: Peter Siu