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Facebook Crypto Wallet Novi faces heat from U.S. Senators

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The group comprised of U.S. senators has asked Facebook CEO Mark Zuckerberg to discontinue his cryptocurrency wallet pilot for his company and pledge not to bring Dasm, the currency Diem on the market. “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,” the senators said.

U.S. Senators Urge Facebook to Stop Crypto Wallet Pilot U.S. Senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith wrote a letter to Facebook CEO Mark Zuckerberg regarding the company’s cryptocurrency initiative on Tuesday, after Facebook announced the first pilot program for its cryptocurrency wallet Novi.

Facebook has selected the listed crypto exchange on Nasdaq Coinbase as its Custody Partner in this trial. “Novi users who can participate in the pilot will be able to obtain pax dollar (USDP) via their Novi account that Novi will store on deposits with Coinbase Custody. Novi users will be able to transfer USDP to each other instantly,” Coinbase explained.

The letter states the fact that Facebook has stated on numerous occasions that it will not introduce a cryptocurrency without the approval of the federal financial regulators.

The lawmakers also noted the fact that “Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically but also for stablecoins in general.”

The letter also states the fact that “In addition to the risks products like Diem pose to financial stability, you have not offered a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity.”.

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