Facebook yesterday launched its new crypto wallet Novi, initially meant to hold Facebook’s own Diem stablecoin
Facebook says its choice of the USDP stablecoin was motivated by consumer protection, crucial regulatory aspects and the full fiat backing the currency holds. However, Facebook plans to eventually shift its wallet from USDP to Diem. The tech giant explained that the switch is because the latter offers better consumer protection measures and checks.
“The goal for Novi has been and always will be to be interoperable with other digital wallets, and we believe a purpose-built blockchain for payments, like Diem, is critical to deliver solutions to the problems people experience with the current payment system,” Facebook stated.
Diem was launched in 2019 under the name Libra, but the proposed stablecoin was plagued by setbacks and endless scrutiny. In particular, Senators Brian Shatz and Sherrod Brown wrote to the social networking company to complain that the project subjected both consumers and the financial system to several risks.
“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. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
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