US Senate Calls for Facebook to Stop Novi Wallet Pilot

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A group of US senators have urged Facebook CEO Mark Zuckerberg to immediately end the Novi digital wallet pilot and commit to not bringing the stablecoin Diem to the market.

In an open letter, Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith have expressed “strong opposition to Facebook’s renewed effort to launch a crypto and digital wallet.”

The legislators have recalled the company has repeatedly committed itself not to launch digital currency without the approval of federal financial regulators. The politicians said:

“Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a 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.”

They have noted getting approval to transfer money “in almost every state” is not equivalent to “a blessing from all US regulators.”

Federal agencies are only studying the risks that stablecoins pose to financial stability and are considering ways to eliminate them, the politicians have stressed.

Also, in their opinion, Facebook did not provide a “satisfactory explanation” of how it will prevent the use of Diem in illegal financial activities.

The senators have recalled the recent scandal with the social network algorithms and said that in the pursuit of profit, the company is indifferent to the harm that its products cause to consumers. The letter read:

“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.”