Tuesday, June 25, 2024

US Senators Demand Facebook To Stop Developing Novi Wallet

On October 19, Facebook announced the launch of a pilot test of its own crypto wallet. The company chose the first public crypto exchange Coinbase as a custodian partner

A group of US senators “strongly recommended” Facebook CEO Mark Zuckerberg to immediately close the Novi cryptocurrency wallet pilot project and stop developing the Diem stablecoin.

Senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith wrote an open letter in which they recalled that Facebook has repeatedly made statements that it will not release its own stablecoin without regulatory approval.

Senators explained that federal regulators have just begun to study the risks that stablecoins can pose to the financial system and its stability.

The politicians also noted that Facebook did not provide an explanation of how it plans to prevent Diem from being used in illegal activities.

On October 19, Facebook announced the launch of a pilot test of its own Novi crypto wallet. She chose Coinbase, the largest cryptocurrency exchange in the United States, as a custodian partner .

The Diem Association, which develops the eponymous stablecoin, has responded to a letter from US senators. She claims that the Novi wallet testing has nothing to do with stablecoin.

The organization also recalled that the Financial Crimes Enforcement Agency (FinCEN) commented positively on Diem ​​control system, which allows illegal transactions to be detected.

Facebook planned to release its own stablecoin in the first half of 2020, but scrapped those plans due to warnings from regulators.

Last year, Facebook rebranded the project, changing the name of the stablecoin from Libra to Diem. The company explained that this was due to the negative that the early version received.

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