- The pilot program will use Pax Dollar (USDP) instead of Diem.
- The social media giant tapped Coinbase Custody to store crypto assets.
- US senators wrote an open letter, demanding that CEO Mark Zuckerberg “immediately discontinue” the Navi pilot project.
Facebook has launched a pilot program for its digital wallet Novi in Guatemala and the US except Alaska, Nevada, New York, and the U.S. Virgin Islands.
Starting this week, a small group of users in both countries can download the digital wallet app on iPhone and Android devices. This limited number of users can add money to their accounts using a debit card and once the account is funded, they can send and receive money using USDP.
For its wallet, the social media giant tapped crypto exchange Coinbase’s custodial services, which manages $180 billion in assets, and Paxos’ stablecoin Pax Dollar (USDP) for the project.
Facebook selected USDP for its pilot phase because of its “important regulatory and consumer protection attributes,” and is fully backed by cash, said the company.
The Pilot Program is Using Paxos Dollar (USDP)
Currently, Novi isn’t using the company’s own stablecoin, Diem. But ultimately, the company intends to launch it with Diem once it receives regulatory approval and goes live.
First announced in 2019 and originally named Libra, Facebook ran into regulatory issues after central banks globally opposed the company’s plan to launch a stablecoin, which was to be based on a basket of fiat currencies.
While Facebook has since then given up its multi-currency plan to focus on single-currency stablecoin, it is still facing resistance from regulators.
An Open Letter to Mark Zuckerberg
Following the Novi pilot project launch, US Senators Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Tina Smith (D-Minn.), Richard Blumenthal (D-Conn.), and Brian Schatz (D-Hawaii), wrote an open letter opposing Facebook’s Diem project.
The senators ordered CEO Mark Zuckerberg to “immediately discontinue the company’s pilot of Novi” and end the project because they can’t be trusted to protect user data or manage a payment network.
”We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market,” the lawmakers said. “To be clear, your ability to secure state-issued money transmitter licenses is not equivalent to obtaining the blessing of ‘all U.S. regulators,’ as you said in your testimony two years ago,” they added.
The same day also came the reports that Facebook is planning to change its company name to reflect its focus on building the metaverse. Zuckerberg is reportedly planning to talk about the change at the company’s annual Connect conference on Oct. 28.