US Lawmakers Ask Facebook to Terminate Crypto Pilot

Hours after Facebook revealed its plans to launch a pilot of its crypto wallet Novi, a group of US lawmakers raised concerns over the handling of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term by the social media giant.

Additionally, the lawmakers urged the technology company to scrap its pilot project immediately. The letter to Facebook CEO Mark Zuckerberg was signed by the Democratic senators: Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith.

“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,” the letter stated.

However, the Facebook-led crypto consortium said that the lawmakers misunderstood the relationship between Diem and Facebook.

“Diem is not Facebook,” Diem wrote. “We are an independent organization, and Facebook’s Novi is just one of more than two dozen members of the Diem Association. Novi’s pilot with Paxos is unrelated to Diem.”

Can't Trust Facebook with Crypto

Facebook first unveiled its cryptocurrency project in mid-2019 but soon started to face regulatory backlash across the globe. The monetary regulators are primarily concerned that the launch of private money by a company of this size and user base will destabilize the monetary system.

Moreover, this led to the exodus of several original consortium partners and prompted the project to rebrand to Diem from Libra.

“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” the lawmakers’ letter added.

In addition, Facebook is facing a recent backlash as a whistleblower from the company revealed that the company ignored user safety over profits. Furthermore, reports are surfacing that the social media giant is considering rebranding itself.