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US Senators Urge Facebook to Discontinue Crypto Wallet Pilot Citing ‘Insufficient’ Ability to Keep Consumers Safe

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US Senators Urge Facebook to Discontinue Crypto Wallet Pilot Citing ‘Insufficient’ Ability to Keep Consumers Safe

A group of U.S. senators has asked Facebook CEO Mark Zuckerberg to discontinue his company’s crypto wallet pilot and commit to not bringing the cryptocurrency Diem to 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 lawmakers said.

US 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 project Tuesday after the social media giant launched a pilot for its crypto wallet Novi.

Facebook has chosen the Nasdaq-listed crypto exchange Coinbase as its custody partner for the pilot. “Novi users who can participate in the pilot can acquire pax dollar (USDP) through their Novi account, which Novi will hold on deposit with Coinbase Custody. Novi users will then be able to transfer USDP between each other instantaneously,” Coinbase explained.

Citing several scandals involving Facebook, the senators wrote:

Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived efforts to launch a cryptocurrency and digital wallet, now branded ‘Diem’ and ‘Novi,’ respectively.

The letter explains that Facebook has said on many occasions that it would not launch a digital currency absent federal financial regulators’ approval.

The lawmakers noted 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 points out 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.”

“Facebook‘s decision to pursue a digital currency and payments network is just one more example of the company ‘moving fast and breaking things’ (and in too many cases, misleading Congress in order to do so). Time and again, Facebook has made conscious business decisions to continue with actions that have harmed its users and the broader society,” the letter continues.

The senators further wrote:

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.

“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market,” the lawmakers concluded.

What do you think about U.S. lawmakers attempting to stop Facebook’s crypto wallet pilot? Do you agree that Facebook cannot be trusted? Let us know in the comments section below.

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Published at Thu, 21 Oct 2021 00:00:00 +0000

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