About five Democrats in the United States Senate have requested that Facebook stop its crypto projects. This was addressed in a letter written on Tuesday by the senators to Mark Zuckerberg, the CEO of Facebook after the social media giant released its digital wallet in collaboration with Coinbase.
The new digital wallet launched by Facebook called Novi is part of its test program in the United States and Guatemala. About two years ago, the company revealed its intention to enter the crypto space with a project called Libra, but the announcement followed heavy criticism from regulators and lawmakers in the country, which led to the discontinuation of the project. Later, the firm rebranded the project to Diem, which is still not ready for launch yet.
The launch of Novi, however, is the reason for the brewing opposition from the lawmakers as it stated that the social media giant could not be trusted with the management of either cryptocurrency or payment system.
The two paged letter was received from the office of Brian Schatz of the US Senate and also bore the signatures of Sherrod Brown, Richard Blumenthal, Tina Smith, and Elizabeth Warren.
The Push Back of the Senators
On the 19th of October, Facebook released a notice that its users in Guatemala and United States can now sign up for the test program.
In the letter written and signed by the five senators, several reasons were highlighted as to why they are insisting that the company should discontinue all its crypto projects. Of all of the reasons is the fact that the company is not concerned about the looming harm the products will bring to its users.
The letter also referred to the questioning that led to the discontinuation of Libra in 2019. It was captured that in October 2019, Brown and Schatz wrote to the Libra Association, who precede the Diem Association, to express their concerns on the risks attached to the project they have at hand. Instead of addressing the concerns, Facebook went ahead to rebrand the project and continue its endeavour.
In addition, they referred to a statement made by the Head of Payments and Financial Services at Facebook, David Marcus, in an announcement released on Tuesday. In the announcement, he said the firm is looking to release the digital wallet project together with Diem once it gets approval from the regulators.
Facebook’s Consistent Trouble with the Lawmakers
For several times, Facebook has been caught in the web of lawmakers for various reasons. Just a year after the Cambridge Analytica Data Scandal that got the CEO to appear before Congress, Mack Zuckerberg had to appear again on the Libra project.
The letter written to Zuckerberg referenced his commitment before the lawmaker in 2019 not to launch any financial project without getting approval from Congress.
The digital wallet launched recently by Facebook has received heavy criticism from the lawmaker after Frances Haugen, a whistleblower from Facebook, testified before the senate that the products from Facebook are harming the users.