{"id":358686,"date":"2021-10-27T16:11:00","date_gmt":"2021-10-27T13:11:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance\/"},"modified":"2021-10-27T16:11:00","modified_gmt":"2021-10-27T13:11:00","slug":"privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance\/","title":{"rendered":"# Privacy or policy? Why Facebook\u2019s crypto wallet, Novi, is facing resistance"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3df8a382e88\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3df8a382e88\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance\/#Bringing_stablecoins_to_the_masses\" >Bringing stablecoins to the masses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance\/#Regulatory_woes\" >Regulatory woes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/privacy-or-policy-why-facebooks-crypto-wallet-novi-is-facing-resistance\/#Shift_to_the_metaverse\" >Shift to the metaverse<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Privacy or policy? Why <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a>\u2019s crypto wallet, Novi, is facing resistance  <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTAvMjY3MzBiYTgtZTk1NC00YzU5LWFhMDctZmRmYzYzOGI1OTU1LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>The stablecoin market has grown exponentially over the last few months due to the numerous advantages blockchain-based versions of fiat currencies have. But, when Facebook launched its cryptocurrency wallet Novi using Paxos\u2019 stablecoin, some United States senators were quick to oppose it. Are they concerned about user data or monetary sovereignty?<\/p>\n<p>The social media giant which, according to its Q2 2021<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investor.fb.com\/investor-news\/press-release-details\/2021\/facebook-reports-second-quarter-2021-results\/default.aspx\"> report<\/a>, has 2.9 billion monthly active users across all of its platforms, t<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed Coinbase and Paxos for its Novi digital wallet project that kicked off its testing phase in the U.S. and Guatemala on Oct. 19.<\/p>\n<p>The pilot program allows users in both countries to download the Novi digital wallet app for iOS or Android devices and fund their accounts with a debit card. The wallet allows them to send and receive Pax dollars (USDP), which are dollar-pegged stablecoins issued by Paxos.<\/p>\n<p>Novi customer funds will be custodied with Coinbase, which manages over $180 billion in assets. A Facebook spokesperson told Cointelegraph that the pilot phase allows the company to evaluate the wallet\u2019s core functions and showcase operational capabilities.\u00a0<\/p>\n<p>Additionally, the spokesperson said that the company hasn\u2019t dropped support for the permissionless payment system it\u2019s developing called the Diem network and is, instead, waiting for a green light from Washington. After receiving regulatory approval, Facebook plans to launch Novi with Diem.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bringing_stablecoins_to_the_masses\"><\/span>Bringing stablecoins to the masses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Facebook\u2019s digital wallet Novi and its use of a stablecoin custodied by a central entity may go against the cryptocurrency space\u2019s ethos of decentralization and self-sovereignty but could help move blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> to the back-end, potentially allowing billions of people to use it every day without noticing.<\/p>\n<p>Speaking to Cointelegraph, Justin Hartzman, CEO of Toronto-based cryptocurrency exchange CoinSmart, said he believes the launch of Novi is \u201cdefinitely a major step towards mainstream adoption\u201d of cryptocurrencies, given Facebook\u2019s massive user base.<\/p>\n<p>Hartzman said that on the negative side of Novi\u2019s launch, users won\u2019t be holding their own coins directly, but will instead \u201ckeep track of your USDP balances while they are held in custody by Coinbase.\u201d<\/p>\n<p>Sergey Zhdanov, chief operating officer of United Kingdom-based cryptocurrency exchange EXMO, echoed Hartzman\u2019s sentiment on the potential advantages of the Novi project, pointing out that stablecoins today are the \u201cmain bridge between traditional finance and the cryptocurrency market.\u201d Zhdanov told Cointelegraph:<\/p>\n<blockquote><p>\u201cNot to mention the fact that stablecoins are often the only possible option for receiving and sending money in countries with an undeveloped banking system.\u201d<\/p><\/blockquote>\n<p>Zhdanov said that stablecoins can become the foundation for \u201cfaster and cheaper payments, making it easier for people to pay for goods or store their money.\u201d This will only happen, however, if stablecoins are not \u201cstifled by overly strong regulation.\u201d<\/p>\n<p>Regulators have notably cracked down on Facebook\u2019s original cryptocurrency ambitions, which involved launching a coin backed by a basket of fiat currencies. The project ended up changing course over a year after it was originally announced, complete with a rebrand from Libra to Diem.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Regulatory_woes\"><\/span>Regulatory woes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Soon after Facebook launched its Novi wallet pilot, five senators called for the immediate closure of the cryptocurrency wallet. In a letter sent to Mark Zuckerberg, Facebook\u2019s founder and CEO, the five senators wrote that given the \u201cscope of the scandals surrounding\u201d the company, they were voicing their \u201cstrongest opposition to Facebook\u2019s revived effort to launch a cryptocurrency and digital wallet.\u201d<\/p>\n<p>The letter came from the office of Senator Brian Schatz and was co-signed by senators Tina Smith, Richard Blumenthal, Sherrod Brown \u2014 who also chairs the Banking Committee \u2014 and Elizabeth Warren.\u00a0<\/p>\n<p>In response, Diem told regulators it\u2019s an independent organization, stating, \u201cDiem is not Facebook. We are an independent organization, and Facebook\u2019s Novi is just one of more than two dozen members of the Diem Association. Novi\u2019s pilot with Paxos is unrelated to Diem.\u201d<\/p>\n<p>To Zhdanov, Facebook may not have any other choice but to \u201caccept the request and disconnect the wallet.\u201d He said that global regulators cracked down on Libra because they saw it as a threat to their monetary sovereignty, adding:<\/p>\n<blockquote><p>\u201cIt would be strange to imagine that the United States would easily agree to redirect huge cash flows to a private company with a huge audience.\u201d<\/p><\/blockquote>\n<p>The CEO concluded that he hopes large industry players will be \u201cable to influence what is happening and will not let the largest part of the cryptocurrency market die,\u201d referring to stablecoins.<\/p>\n<p>To CoinSmart\u2019s Hartzman, regulators have been pressuring Facebook because of the company\u2019s past, and not because of its involvement with the cryptocurrency sector or stablecoins. To him, even if Facebook caves to the pressure and shelves Novi, it may not have a major effect on the wider crypto market.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Shift_to_the_metaverse\"><\/span>Shift to the metaverse<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Speaking to Cointelegraph, CEO of trading platform Spectre.ai Kay Khemani pointed to something bigger than Facebook\u2019s plans initially revealed: the company\u2019s rebrand to focus not on social media, but the metaverse.<\/p>\n<p>The metaverse is loosely defined, but it\u2019s often seen as a digital reality combining aspects of social media, augmented reality and online gaming and cryptocurrencies together. Sources at Facebook have been claiming the company is getting ready to announce a rebrand meant to reflect its shift in priorities to the metaverse.<\/p>\n<p>As The Verge <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.theverge.com\/2021\/10\/19\/22735612\/facebook-change-company-name-metaverse\">reported<\/a>, the move is meant to signal the company\u2019s focus on being known for something other than social media. Mark Zuckerberg has said the metaverse will be a \u201cbig focus\u201d for Facebook as he believes it \u201cis just going to be a big part of the next chapter for the way that the internet evolves after the mobile internet.\u201d<\/p>\n<p>Khemani said that Facebook is an innovator that \u201cchanges paradigms\u201d and that it could corner the market by owning both premier virtual reality hardware producer Oculus and having the largest social media user base out there.<\/p>\n<p>These two things combined could make Facebook a major player in the metaverse, one that U.S. regulators may be more lenient on to \u201cprevent the social media conglomerate from potentially relocating its operations outside the USA.\u201d That move, Khemani said, would trigger an exodus from tech giants that would \u201cundoubtedly harm the U.S. economy.\u201d<\/p>\n<p>As it stands, Facebook appears to be moving forward with both its cryptocurrency wallet Novi and its stablecoin project Diem. If the company manages to make the use of blockchain technology imperceptible, it could launch a cryptocurrency application that would be adopted by billions.<\/p>\n<p>As Facebook is already working with Coinbase and Paxos, it wouldn\u2019t be a stretch to believe Novi could, in the future, offer its users seamless access to other cryptocurrencies including Bitcoin (BTC). Veteran crypto users may nevertheless choose to stay away, as controlling their private keys is paramount.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/privacy-or-policy-why-facebook-s-crypto-wallet-novi-is-facing-resistance\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Privacy or policy? Why Facebook\u2019s crypto wallet, Novi, is facing resistance &#8221; The stablecoin market has grown exponentially over the last few months due to the numerous advantages blockchain-based versions of fiat currencies have. But, when Facebook launched its cryptocurrency wallet Novi using Paxos\u2019 stablecoin, some United States senators were quick to oppose it&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":358687,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTAvMjY3MzBiYTgtZTk1NC00YzU5LWFhMDctZmRmYzYzOGI1OTU1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74860,75494,74889,117,4974,71511,55229,70934,4965,67874],"class_list":["post-358686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrency-exchange","tag-libra","tag-payments","tag-business","tag-facebook","tag-government","tag-law","tag-regulation","tag-technology","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/358686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=358686"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/358686\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/358687"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=358686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=358686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=358686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}