The five senators who sign the letter addressed to Facebook They are Brian Schatz, Elizabeth Warren, Tina Smith, Richard Blumenthal, and Sherrod Brown.
Was expected. Facebook announced yesterday the launch of a pilot of its digital wallet I did not see, where the stablecoin will be used Paxos, and will have the backing of Coinbase. This pilot starts in the United States and Guatemala and will first be with the Pax Dollar from Paxos, although it is expected to continue with its own stablecoin: Diem. Well, as has happened since the social media company first reported its intentions for its own crypto in 2019 (at that time called Libra), opposition from members of the US legislature was once again present. And in a forceful way.
Five Democratic Senators from the United States signed a letter to ask Facebook suspend your wallet projects I did not see and stablecoin Diem. Senators sent a letter to CEO Mark Zuckerberg yesterday just hours after the launch of his digital wallet. I did not see in association with Coinbase.
Senators expressed strong opposition to the project because “Facebook cannot be trusted to manage a payment system or digital currency”. The letter came from Senator Brian Schatz’s office and was signed by him and four other lawmakers: Elizabeth Warren, Tina Smith, Richard Blumenthal, and Sherrod Brown.
In their letter, the senators highlighted several reasons why they insist on why the company should stop crypto projects. First, the fact that Facebook does not care about the harm its products cause to users. It says verbatim:
“Lawmakers are once again facing a scandal involving reports of the relentless pursuit of profits at the expense of their users. The most recent allegations detail the use of algorithms that harm adolescents and adolescents, particularly girls. Facebook was repeatedly indifferent to the damage caused by its products. “
They also referred to 2019, when the project Libra of the company was questioned and finally arrested. “In October 2019, Senators Schatz and Brown wrote to members of the Diem Association’s predecessor, the Libra Association, and expressed deep concern about the risks the project posed to consumers and the financial system. Subsequently, Facebook shelved Libra amid regulatory scrutiny, but did not address our concerns before resuming this effort. “
In addition, they pointed to a comment that the head of Payments and Financial Services of Facebook, David Marcus, did in the Twitter thread where he made the news public. There he said the company plans to launch I did not see with Diem once you receive regulatory approval. AND Diem is the new name that, at the end of 2020, Facebook gave Libra, the rejected stablecoin, to change its image.
They say in the letter:
Despite these guarantees, Facebook once again pursues digital currency plans on an aggressive schedule and has already launched a pilot for a payments infrastructure network, even though these plans are inconsistent with the actual financial regulatory landscape, not just for Diem specifically but also stablecoins in general. “
The letter mentions that “In addition to the risks that products like Diem pose to financial stability, it has not offered a satisfactory explanation of how Diem will prevent illicit financial flows and other criminal activity.”
Also, add very harsh and distrustful words about the company: Unfortunately, Facebook’s decision to pursue a digital currency and payments network is just one more example of the company ‘moving fast and breaking things’ (and in too many cases, tricking Congress into doing so). Time and again, Facebook has done business with conscious decisions to continue with actions that have harmed its users and society in general. You cannot rely on the management of a payment system or digital currency when your existing ability to managing risks and keeping consumers safe has proven to be totally insufficient ”.
They concluded by urging Facebook to “Immediately discontinue your Novi pilot and commit not to bring Diem to market”.
In response to the senators’ letters, a Novi spokesperson said: “We look forward to responding to the Committee’s letter.”
It is worth saying that the senators, in the letter, cited a comment that Zuckerberg himself made in 2019 before the House of Representatives Committee on Financial Services. At that time he guaranteed that Facebook would not launch a payment system Nowhere in the world unless approved by US regulators. Was referring to Libra, not Diem which was a later project (rather, a name change of the same project).
Now it seems that Zuckerberg does not intend to keep his word.
Version of DailyBitcoin
Image from Unsplash