Sen. Elizabeth Warren (D-MA) and four other Senators from her party sent a warning letter to Facebook CEO Mark Zuckerberg hours after the company launched its digital wallet Novi. They demanded that he “immediately discontinue” the programme.
Facebook cannot be trusted to manage a payment system or digital currency when its current ability to manage risks and keep consumers safe has proven wholly inadequate
The road to launching a wallet and stablecoin has been difficult for Facebook. A series of scathing congressional hearings in 2019 effectively put an end to the project, which was originally dubbed Libra. Eventually, a number of key partners left the Libra Association, Libra renamed itself Diem, and Facebook’s wallet Calibra renamed itself Novi.
Novi launched a pilot programme in the United States and Guatemala this morning, allowing users to buy and trade Paxos Dollars (USDP) instantly and without fees. Coinbase will hold all funds involved in the programme and will provide Novi with crypto custody services.
The platform, notably, does not include Facebook’s long-awaited cryptocurrency, Diem. This does not appear to have appeased the senators, who also include Brian Schatz (D-HI), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), and Tina Smith (D-MN).
However, Facebook stated this morning that the launch of Novi today is a critical first step toward the Diem payment network’s rollout: “We intend to migrate Novi to the Diem payment network once it receives regulatory approval.”
Whether 2021 will provide a more suitable atmosphere for Facebook’s crypto endeavours is another question. The 2019 Libra hearings took place in the aftermath of Facebook’s detrimental Cambridge Analytica scandal; today’s scorching condemnation was likely influenced by the explosive testimony of Facebook whistleblower Frances Haugen before the Senate Commerce Committee just weeks ago.