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

Facebook

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 run a payment system or digital currency when its current ability to manage risk and keep consumers safe has proven to be woefully inadequate,” 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 chose the Nasdaq Coinbase-listed crypto exchange as the custodian 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 themselves instantly, ”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 repeatedly stated that it will not launch a digital currency without the approval of federal financial regulators.

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 that products like Diem present to financial stability, you have not provided a satisfactory explanation of 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 time again, Facebook has made conscious business decisions to pursue actions that have harmed its users and society in general, ”the letter continued.

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 stop your Novi pilot project and commit not to commercialize Diem,” the lawmakers concluded.

admin

Read Previous

This is a major hint with regards to an upcoming price swing for Ethereum

Read Next

Ethereum Rallies Above $4K, Why Rally Isn’t Over Yet

Leave a Reply

Your email address will not be published. Required fields are marked *

Right Menu Icon