Facebook Pilots Novi Crypto Wallet With Coinbase, but Senators Urge Zuckerberg to ‘Immediately Discontinue’

By Benzinga
October 20, 2021 Updated: October 20, 2021

Social media giant Facebook has launched a pilot of its Novi crypto wallet in the United States and Guatemala but is already facing strong opposition from five Democratic senators.

What Happened

David Marcus, head of Facebook Financial, announced the Novi pilot program on Tuesday to test the crypto wallet’s core feature functions and its own operational capabilities.

The project was brought to life through partnerships with crypto exchange Coinbase Global Inc. and blockchain infrastructure platform Paxos.

After downloading the Novi digital wallet app, users participating in the pilot program can fund their accounts and transact with the Paxos Dollar, a Paxos-issued stablecoin pegged to the value of the U.S. dollar.

“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live. We care about interoperability and we want to do it right,” said Marcus with regards to Facebook’s in-development cryptocurrency Diem.

However, only hours after Marcus’s announcement, U.S. Senators Brian Schatz, Tina Smith, Richard Blumenthal, Sherrod Brown, and Elizabeth Warren called for the project to be shut down.

“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,” wrote the senators in a letter addressed to Facebook CEO Mark Zuckerberg.

“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market,” they stated.

Price Action

On Wednesday morning, Facebook shares are 0.14 percent higher at $340.37; Coinbase is up 2.34 percent at $312.79; and the leading digital asset Bitcoin is up 5.50 percent at $65,917.89 after the first U.S.-based Bitcoin futures ETF began trading on the NYSE.

By Samyuktha Sriram

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