U.S. lawmakers say Facebook cannot be trusted to manage cryptocurrency

U.S. lawmakers say Facebook cannot be trusted to manage cryptocurrency
U.S. lawmakers say Facebook cannot be trusted to manage cryptocurrency   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Kanishka Singh</p> <p> – A group of U.S. lawmakers said Facebook Inc cannot be trusted to manage cryptocurrency and urged the social media platform to discontinue immediately a small pilot of its cryptocurrency wallet named Novi, which was launched on Tuesday.</p> <p>U.S. Democratic senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith voiced their opposition to Facebook’s two-year-old effort to launch a cryptocurrency and digital wallet.</p> <p>“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” the senators wrote in a letter to Facebook Chief Executive Mark Zuckerberg.</p> <p>“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 senators wrote.</p> <p>The letter by the senators indicates that even Facebook’s small pilot of its cryptocurrency wallet will face scrutiny from lawmakers and regulators, who have previously raised antitrust and other concerns.</p> <p>A Novi spokesperson said: “We look forward to responding to the committee’s letter.” </p> <p>Facebook unveiled a cryptocurrency project in June 2019, as part of an effort to expand into e-commerce and global payments.</p> <p>But the project immediately ran into fierce opposition from policymakers globally, who worried it could erode their control over the money system, enable crime and harm users’ privacy.</p> <p>In December, the project was rebranded in a renewed effort to gain regulatory approval, with its scope scaled back further to a single dollar-backed digital coin.</p> <p/> </div>