Elizabeth Warren and four US Senators ask Zuckerberg to stop Facebook’s Novi cryptocurrency wallet
Hours after Facebook tested the Novi cryptocurrency wallet with Coinbase and Paxos, US Senator Elizabeth Warren (D-MA) and four other senators warned CEO Mark Zuckerberg to end the project “immediately”.
Senator Elizabeth Warren (D-MA)
Novi launched a pilot program in the United States and Guatemala this morning (October 20) that will allow users to buy and trade Paxos dollars (USDP) instantly and with no fees. Coinbase provides Novi crypto custody services and will hold all funds related to the project.
Novi has not integrated Facebook’s long-awaited cryptocurrency “Diem”, but Elizabeth and senators such as Brian Schatz (D-HI), Sherrod Brown (D-OH) and Richard Blumenthal (D-CT) have not been able to appease this either. and Tina Smith (D-MN).
“Facebook cannot regulate payment systems or digital currencies if the company’s current ability to manage risk and ensure consumer safety has proven inadequate,” the senators said.
Facebook’s path to adopting wallets and stablecoins has been fraught with difficulties. In 2019, the giant had to undergo a series of Congressional hearings that put the original project called Libra on hold. Eventually a number of key partners withdrew from the Libra Association, Libra later changed its name to Diem and Facebook’s wallet Calibra changed its name to Novi.
Facebook has made it clear that the introduction of Novi is an important first step on the way to Diem’s rollout:
“We plan to move Novi to the Diem payment network as soon as it has regulatory approval.”
It remains unclear whether 2021 will provide a more favorable environment for Facebook’s crypto ambitions. The 2019 hearings followed the Cambridge Analytica Facebook scandal (which collected personal data from 87 million users). Today’s warning may stem from what Facebook whistleblower Frances Haugen told the Senate Trade Committee a few weeks ago.
The senators demanded that Facebook immediately give up Novi and cancel any plans for Diem’s future release.
“Facebook has consistently made conscious business decisions to continue taking actions that harm its users and society at large.”
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