Facebook is an insanely huge company with a net worth in the billions, they are far from without controversy. There have been more scandals in regard to privacy, data protection and fake news than most people can count… and the company is far from done.
The current ongoing issue is a rather severe one – when Facebook announced their intent to launch a cryptocurrency, the crypto world was skeptical to say the least. A huge number of people had justified concerns about, well, all the things Facebook has a history of doing, very little of which is compatible with what a working cryptocurrency and wallet needs to be.
The original project name was Libra – it was then rebranded to Diem, and it was supposed to be Facebook’s big crypto project, but right off the bat, things weren’t working right. Libra/Diem was shelved altogether when Facebook decided to go down the route of a stablecoin instead – the Paxos Dollar.
A stablecoin isn’t variable based on supply and demand the way most coins are – it’s always worth the same amount of the connected Fiat coin – in this case, the US Dollar. So, for example, 1USD will always buy 1 Paxos Dollar, or whatever amount it is set at. Of course, a coin won’t be much good without a wallet… and that’s where the next batch of issues arose. Novi is the name of the wallet project that Facebook came up with and has recently launched in the US and Guatemala as a sort of test run before a global launch.
What a crypto wallet needs to be
Of course, it’s the same issue all over again – a crypto wallet has steep requirements of safety, privacy and even anonymity, none of which is compatible with just about anything in Facebook’s spotty history of violations. Even so, it was quite a surprise when the US Senate went ahead and issued a public letter to Mark Zuckerberg asking him to can the project.
Just a week after the pilot went live in the US and Guatemala, several Senate Democrats got together to appeal to stop the project. Brian Schatz, D-HI, Sherrod Brown, D-Ohio, Elizabeth Warren, D-Mass, and two others got together to write the letter.
“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 says. “We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
The letter is two pages long and outlines the concerns the Senate has about Facebook’s ability to do a good job on their crypto project. The letter is quite a scathing indictment of Facebook’s past issues. “Unfortunately, Facebook’s decision to pursue a digital currency and payments network is just one more example of the company “moving fast and breaking things” (and in too many cases, misleading Congress in order to do so). Time and again, Facebook has made conscious business decisions to continue with actions that have harmed its users and the broader society.” The letter reads.
There’s no word on how Facebook will react to the letter if at all – however, it’s fairly unlikely that Facebook will heed the request, as they don’t, historically, comply with such requests. Another aspect is Facebooks’ plan to create a metaverse – a crypto wallet and coin are all but necessary to do so, making it even less likely that they’ll abandon ship at this point.