In Brief:
- The U.S. senators have written a letter to Facebook to stop immediately crypto wallet service “Novi”
- Facebook had launched its testing platform backed by Coinbase and Paxos
- In the letter authority stated that “Facebook cannot be trusted to manage a payment system or digital currency”
Once Again, a Social media giant Facebook was trapped into authority scrutiny as five U.S. senators had ordered Facebook to immediately stop its new crypto wallet “Novi” services after the few hours of its launch of the pilot testing phase.
On Tuesday, Facebook had launched its first digital wallet service under the label of Novi. In this project, Facebook had made a collaboration with leading crypto exchange Coinbase and Paxos.
The launch was just for the testing purpose, In which users from the United States and Guatemala were allowed to access Novi digital app on iPhone and Android as well as they were able to add money to their accounts through debit cards.
Also, they had added a PAX dollar (USDP) as the native token, which is a stablecoin backed by the dollar and introduced by the blockchain trust company Paxos.
Unluckily, the launch had caught the attention of regulators and become a victim of another regulator scrutiny in the crypto space.
Five U.S. lawmakers co-signed a letter for Facebook to “immediately discontinue the company’s pilot of Novi” and to wind up their operation on the Diem stablecoin project. The list of five U.S senators includes Brian Schatz (D-Hawaii), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), and Tina Smith (D-Minn.)
According to lawmakers’ open letter, Facebook cannot be trusted to protect users’ data or manage the privacy of payments networks.
Senators wrote: “Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded ‘Diem’ and ‘Novi,’ respectively.”
According to letter, “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.”
