Facebook Pilots Novi Crypto Wallet With Coinbase, But Senators Urge Zuckerberg To 'Immediately Discontinue'

Social media giant Facebook, Inc. FB has launched a pilot of its Novi crypto wallet in the U.S. and Guatemala but is already facing strong opposition from five Democratic U.S. senators.

What Happened: David Marcus, head of Facebook Financial, announced the Novi pilot program on Tuesday to test the crypto wallet’s core feature functions and its own operational capabilities.

Congrats @davidmarcus and team!

It takes a lot of perseverance to ignore the haters and ship. https://t.co/QRAvqXnPd0

— Brian Armstrong (@brian_armstrong) October 19, 2021

The project was brought to life through partnerships with crypto exchange Coinbase Global Inc COIN and blockchain infrastructure platform Paxos.

After downloading the Novi digital wallet app, users participating in the pilot program can fund their accounts and transact with the Paxos Dollar USDP/USD, a Paxos-issued stablecoin pegged to the value of the U.S. dollar.

“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live. We care about interoperability and we want to do it right,” said Marcus with regards to Facebook’s in-development cryptocurrency Diem.

However, only hours after Marcus’s announcement, U.S. Senators Brian Schatz, Tina Smith, Richard Blumenthal, Sherrod Brown and Elizabeth Warren called for the project to be shut down.

“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,” wrote the senators in a letter addressed to Facebook CEO Mark Zuckerberg.

“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market,” they stated.

Price Action: On Wednesday morning, Facebook shares are 0.14% higher at $340.37; Coinbase is up 2.34% at $312.79; and the leading digital asset Bitcoin BTC/USD is up 5.50% at $65,917.89 after the first U.S.-based Bitcoin futures ETF began trading on the NYSE.

Photo: Thought Catalog on Unsplash