The Diem stablecoin project has distanced itself from Facebook in response to Democratic senators calling for the immediate cessation of the firm’s Novi crypto wallet.
The company stated that the project was not “Facebook-related” and that the social media company had no role in its development.
The Facebook Wallet was announced in March 2013 as a way for the company’s users to send money to friends and family via a social graph. The app was closed in 2014, but the company has been exploring ways to revive the project in recent months.
According to CNBC, Democrat senator Mark Warner has written to Facebook CEO Mark Zuckerberg to ask him to come clean. “I’m concerned that Facebook may have provided privileged access to sensitive user data to potentially hundreds of developers without users’ explicit consent,” said Warner in the letter.
The Diem Stablecoin Project
Democratic Senators Mark Warner, Catherine Cortez Masto, Tom Udall, Chris Van Hollen, and Gary Peters have urged the social media giant to cease all of its cryptocurrency-related activities following the Cambridge Analytica scandal.
The group of politicians recommended that Facebook not only stop the development of its cryptocurrency but also shut down its “plans to create a new digital currency called Libra.”
The Republican lawmakers wrote in the letter to the Republican Committee (RPC) chairman, “We write to share our serious concerns about the privacy risks of Facebook’s planned digital currency, the ‘Libra,’ as well as the financial risks posed by the proposed currency’s opaque structure.
“Facebook must take immediate action to responsibly address the risks to the security, privacy, and financial stability of its customers and all Americans.
The lawmakers raised concerns that the subsidiary of the social media giant might be sharing customer data with third parties. Meanwhile, anonymous sources informed that Facebook has slowed down its crypto project, but the company claims that is not the case.
Diem’s response to the senators’ letter claimed that the senators had misconstrued Diem’s relationship with Facebook. The day after the letter, Novi launched their wallet in association with Coinbase, and only in the U.S. and Guatemala for now.
“Diem is not Facebook. We are an independent organization, and Novi from Facebook is just one of more than two dozen members of the Diem Association. Novi’s pilot with Paxos is not related to Diem.“, responded the company. Technically true, but the concerns of US senators may not be alleviated.
Diem’s ties to social media are strong. The stablecoin project, formerly known as Libra, was originally proposed by Facebook in 2017. Facebook’s CFO David Marcus is also the co-founder and board member of Diem.