Facebook Novi Wallet Meets Opposition From Lawmakers

Reading Time: 2 minutes
  • Facebook has launched a pilot of its Novi cryptocurrency wallet
  • The Novi pilot will not feature the Diem cryptocurrency
  • Democratic lawmakers have demanded that Facebook pull the pilot and stop working on Diem

Facebook’s attempts to launch some kind of cryptocurrency have been met with more pushback as the social media company, whose reputation has sunk to new lows in the past two weeks, met with more resistance from U.S. lawmakers. As Facebook announced the pilot release of its Novi cryptocurrency wallet, without the rebranded Diem cryptocurrency, a group of Democrats warned that the company cannot be trusted with the personal data that would result from transactions made with the wallet.

Novi Pilot Launched in U.S. and Guatemala

Facebook yesterday announced that a small number of people in the U.S. and Guatemala can now sign up to Novi and start using it, although the Diem stablecoin will not be part of the pilot. Instead, Facebook is partnering with Paxos and Coinbase to let users send and receive Pax Dollars (USDP), although this is thought to be just a bridging process until Diem can finally replace it.

Novi wallet funds will not be held in the wallet itself but will instead be held for Novi by Coinbase Custody Trust Company, a qualified custodian and a New York limited purpose trust company. Novi pilot participants will be able to acquire USDP tokens through their Novi account which they can send to each other instantaneously.

Democrat Lawmakers Lambast Facebook Over Trust Issues

The pilot launch of Novi has not gone down well, however, coming hot on the heels of explosive whistleblower testimony two weeks ago by Francis Haugen about the company’s practices with regards to younger users.

A group of U.S. lawmakers published an open letter as the pilot launched saying that Facebook cannot be trusted to protect the data associated with operating a currency system, demanding that it “immediately discontinue” its Novi pilot and “commit that you (Facebook) will not bring Diem to market.”

Facebook has yet to respond to these demands.