Elizabeth Warren Calls For Immediate Termination Of Facebook’s Novi Wallet

Facebook Joins The Crypto World With Plans For New Currency
Facebook Joins The Crypto World With Plans For New Currency

A group of US senators led by Elizabeth Warren has sent a letter to Mark Zuckerberg, urging him to immediately close down the Novi wallet, which launched on Tuesday. 

Facebook cannot be trusted, say Senators

The letter comments on Facebook’s numerous scandals. The most recent one was discovered by Wall Street Journal, as whistleblowers came forward, stating that Facebook and Instagram knowingly cause harm to teenage girls. The Senators argue that Facebook has “repeatedly shown itself indifferent to the harms its products cause”:

Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook‚Äôs revived effort to launch a cryptocurrency and digital wallet, now¬†branded ‚ÄúDiem‚ÄĚ and ‚ÄúNovi,‚ÄĚ respectively.¬†

Besides Elizabeth Warren, the letter was co-signed by senators Brian Schatz, Richard Blumenthal, Tina Smith, and Sherrod Brown. They conclude that Facebook is not trustworthy for running a private monetary system and urge the company to shut down all operations surrounding Novi and Diem:

Time and again, Facebook has made conscious business decisions to continue with actions that have harmed its users and the broader society. 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 troubled history of Facebook’s stablecoin

The same concerns were present when Facebook first attempted to launch a stablecoin under the name Libra. Additionally, regulators found Facebook’s plans to use a basket of fiat currencies, instead of a single currency as collateral, problematic.¬†

Ultimately, several of the companies within Libra’s founding committee pulled out, which halted the project, but Facebook quickly announced to start a new attempt. Finally, they rebranded the project under the name Diem.¬†

The Novi wallet just started a pilot test in cooperation with Coinbase. For now, users of the wallet are able to send and receive Pax Dollars (USDP). If successful, the pilot is supposed to lead to the integration of Diem into the wallet.