Facebook | Reportedly planning to rebrand by the end of the month, Novi wallet to launch pilot program using USDP, several senators attempt to block after hearing the news

Facebook's digital currency wallet Novi, under the Facebook umbrella, has officially announced the launch of a pilot program. Coinbase will serve as its custodian partner. However, just a few hours after the pilot program was launched, several senators immediately wrote to founder Mark Zuckerberg, requesting an immediate halt to the pilot program and a commitment to never launch the digital currency Diem.

Two Countries Simultaneously Launch Pilot Program

Facebook Financial's head of Facebook Financial, F2, David Marcus announced the launch of Novi's small-scale pilot program in the United States and Guatemala, providing participating users with instant, free funds transfers.

He mentioned that nearly 100% of the population in Guatemala owns a mobile phone, yet 56% still lack access to financial services. Remittances from family and friends abroad account for over 14% of GDP, with 90% of remittances coming from the United States.

Adopting Pax to Establish Business Model

The Novi pilot program will collaborate with Coinbase and the issuer of the US dollar stablecoin, Paxos Standard, by adopting the stablecoin renamed on August 24 of this year, USDP Pax Dollar.

David Marcus emphasized that they have not abandoned the long-developed digital currency, Diem, and plan to launch Novi and Diem simultaneously once regulatory approval is obtained. He stated:

Aside from the pilot program, our business model is very clear. We are challengers in the payment field and will provide free personal transfer payments through Novi. Once we have a stable customer base, we will offer cheaper merchant payments and profit from merchant services.

Coinbase as Custodian

Coinbase also released an official announcement, stating that they will act as the custodian for the Novi pilot program through Coinbase Custody. Users participating in the pilot will receive Pax Dollar USDP in their Novi wallet accounts and can transfer USDP between users for free.

Novi and Diem Face Opposition from Multiple Parties

Shortly after the pilot program announcement, several U.S. senators promptly jointly wrote to founder Zuckerberg, demanding an immediate halt to the pilot program and a commitment to never launch the digital currency Diem. The list of senators includes:

• Democratic Senator Tina Smith
• Democratic Senator Brian Schatz
• Democratic Senator Elizabeth Warren
• Democratic Senator Richard Blumenthal
• Chair of the U.S. Senate Banking Committee Sherrod Brown

The letter claims that this is not only targeted at Diem, but also includes general stablecoins. These plans are inconsistent with the current financial regulatory environment, and Facebook's ability to manage risk and protect consumers is insufficient. It is also unsuitable for Facebook to manage payment systems and digital currencies.

It points out that Facebook and David Marcus have repeatedly promised on multiple occasions not to launch digital currencies without regulatory approval, yet they have set a timetable for the digital currency plan:

Marcus cited Facebook's "almost getting Novi licensed or approved in every state" as the basis and concluded, "Novi is ready to enter the market." However, it needs to be clarified that obtaining a national currency transfer license does not equate to obtaining the blessing of all regulatory agencies.

The letter also mentioned that besides posing a risk to financial stability, Diem has not provided satisfactory explanations on how to prevent illegal money circulation and its use in other criminal activities.

Facebook Plans Name Change

In addition to Novi's progress, anonymous sources cited by foreign media indicate that Zuckerberg plans to rename the company at the annual meeting on October 28, with a focus on the metaverse.

The rebranding may categorize applications like Facebook, Instagram, WhatsApp, etc., under products owned by the parent company. The new name is said to be related to the VR chat room "Horizo," which Facebook has actively developed in the past.