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Facebook Novi Wallet: Will It Be a Gamechanger for the Crypto Industry?

www.financemagnates.com 23 October 2021 10:28, UTC
Reading time: ~3 m

This week, social network giant Facebook unveiled the pilot for its digital wallet Novi, initially targeting US and Guatemala users. For this purpose, Coinbase, a US-listed cryptocurrency exchange, was tapped by Mark Zuckerberg’s company to pilot the new Facebook product via Coinbase Custody. The news made the headlines among the crypto community and the mainstream media, which echoed the announcement as a big one.

However, the fact that an announcement crossed the wires and became a trending topic doesn’t imply that crypto enthusiasts or even lawmakers received it well. As in all the spheres, voices in favor and against Novi sparked and started to discuss unanimously around a point: privacy.

On the one hand, it’s well documented in the media that Facebook has been in the spotlight of governments because of privacy concerns on the social media platform and the way of how Zuckerberg’s company handles the users’ data.

That said, the voices against Facebook crypto wallet are concerned about how the wallet could be a decentralized product or even how it can guarantee privacy to the users. On the other hand, crypto enthusiasts in favor of Novi argued that mainstream adoption of crypto-related products and services is always positive for the industry.

US Lawmakers Concerned on Novi

A group of US lawmakers raised concerns this week about the handling of cryptocurrencies by Facebook.

In addition, the lawmakers urged the technology company to abandon its pilot program immediately. The Democratic senators who signed the letter to Facebook CEO Mark Zuckerberg were Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith.

“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 stated.

But it seems that Zuckerberg is far from giving up on ongoing crypto plans. According to reports that made the headlines this week after the Novi pilot’s announcement, Facebook plans to change its name to reflect its latest endeavor: the metaverse. Zuckerberg is set to announce the renaming at the company’s annual Connect Conference on October 28.

What About Diem?

The question that most people have been asking nowadays in the wake of Facebook’s announcement on Novi is: why cryptos? Of course, there could be many answers, but most of them are ambiguous if they’re asked directly to Facebook. Finally, however, there is an answer to the question of whether Facebook wants to support Diem Association (previously known as Facebook’s Libra) or not:

“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,” Novi project lead David Marcus commented via Twitter.

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