The five senators signing the letter to Facebook are Brian Schatz, Elizabeth Warren, Tina Smith, Richard Blumenthal, and Sherrod Brown.
Facebook announced yesterday the launch of a pilot of its Novi digital wallet, where the Paxos stable coin will get activated, and it will receive a backup from Coinbase.
Said pilot starts in the United States of America, Guatemala, and will first be with Paxos Pax Dollar, although it might continue with its stable coin: Diem.
As has happened since the social media company first reported its intentions for crypto of its own in 2019 (at that time called Libra), opposition from members of the North American legislature was once again present. And more prominently.
Five US Democratic senators signed a letter asking Facebook to suspend its Novi wallet and Diem stable coin projects. Senators wrote a letter for CEO Mark Zuckerberg just hours after releasing its Novi digital wallet in parallel efforts with Coinbase.
Senators expressed strong opposition to the bill because Facebook cannot receive trust to manage a payment system or digital currency.
The letter came from Senator Brian Schatz’s office and got signed by him and four other lawmakers: Elizabeth Warren, Tina Smith, Richard Blumenthal, and Sherrod Brown.
Senators Reasons
In their letter, the senators highlighted several reasons why the company should stop crypto projects. First of all, there is the fact that Facebook doesn’t care about the damage its products might cause to users.
They also referred to 2019, when the company’s Libra project got questioned and eventually stopped. In October 2019, Senators Schatz and Brown spoke to the Diem Association’s predecessor, the Libra Association.
Both representatives had shown deep concern regarding the risks the project posed to consumers and the financial system.
Facebook subsequently shelved Libra amid regulatory scrutiny but did not address our concerns before resuming this effort.
In addition, Facebook pointed out through a series of comments that Facebook’s head of Payments and Financial Services, David Marcus, made on the Twitter thread that the company plans to release Novi with Diem once it receives regulatory approval.
A Total distrust on Facebook
The representative also added very harsh words about the company. He expressed that Facebook’s decision to create a digital currency and payment network is one more example of the company moving fast and breaking things.
Facebook has done business with conscious decisions to keep applying actions that have caused damage to its users and society in general.
It is worth saying that the senators, in the letter, cited a comment Zuckerberg himself made in 2019 before the House Financial Services Committee. The chairman guaranteed that Facebook would not launch a payment system anywhere in the world unless US regulators approve.
The CEO talked about Libra, not Diem, a later project (a name change of the same project called Libra).
By: Jenson Nuñez
