This week, Facebook announced the launch of a pilot program for its digital wallet Novi, which will initially target users in the United States and Guatemala. Coinbase, a publicly traded cryptocurrency exchange in the United States, was chosen by Mark Zuckerberg’s company to pilot the new Facebook product through Coinbase Custody. The announcement made headlines in the crypto community as well as the mainstream media, which characterized it as significant.
However, just because an announcement made the news and became a trending topic doesn’t mean that crypto enthusiasts or even lawmakers were pleased with it. As in all spheres, voices in support and opposition to Novi arose and began to coalesce around a single issue: privacy.
On the one hand, it is well documented in the media that Facebook has been in the spotlight of governments due to privacy concerns on the social media platform and the manner in which Zuckerberg’s company handles the data of its users.
However, critics of the Facebook crypto wallet are concerned about how the wallet can be a decentralized product or how it can guarantee users’ privacy. Crypto enthusiasts in favor of Novi, on the other hand, argued that mainstream adoption of crypto-related products and services is always beneficial to the industry.
Lawmakers in the United States are concerned about Novi.
This week, a group of US lawmakers expressed concerns about Facebook’s handling of cryptocurrencies.
Furthermore, the lawmakers urged the technology firm to discontinue its pilot program immediately. Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith were among the Democratic senators who signed the letter to Facebook CEO Mark Zuckerberg.
“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 inadequate,” according to the letter.
However, it appears that Zuckerberg is far from abandoning his ongoing crypto plans. According to reports that surfaced this week following the Novi pilot’s announcement, Facebook intends to change its name to reflect its most recent venture: the metaverse. On October 28, Zuckerberg will make the announcement at the company’s annual Connect Conference.
How about Diem?
The most common question that has arisen in the aftermath of Facebook’s announcement on Novi is, “Why cryptos?” Of course, there could be numerous answers, but the majority of them are ambiguous if asked directly to Facebook. Finally, there is an answer to whether Facebook will support Diem Association (previously known as Facebook’s Libra) or not:
“I want to be clear that our support for Diem has not changed, and we intend to launch Novi with Diem once it has received regulatory approval and is operational.” We care about interoperability and want to get it right,” Novi project lead David Marcus said on Twitter.