![\"\"](\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2020\/12\/diem-white-elephant.jpg\")
<\/a><\/p>\n<\/p>\n
Remittances to Guatemala<\/h3>\n
David Marcus tweeted on 19 October that Novi was running a small pilot programme to send remittances to Guatemala using Paxos\u2019s Pax Dollar (USDP) \u2014 the stablecoin formerly known as the Paxos Standard. [Paxos<\/i><\/a>]<\/p>\n The pilot will \u201ctest core feature functions, and our operational capabilities in customer care and compliance.\u201d It’s a tryout for Novi, not for the blockchain bit. [Twitter thread<\/i><\/a>]<\/p>\n The plan is eventually to make money from the merchants: \u201cWe\u2019ll offer free person-to-person payments using Novi. Once we have a solid customer base, we\u2019ll offer cheaper merchant payments and make a profit on merchant services.\u201d<\/p>\n The pilot programme already has a waiting list. There’s a cap of $300 per transaction, a $1,000 per day sending limit, and $2,500 maximum daily transactions per account. [Forbes<\/i><\/a>]<\/p>\n Pax is an ERC-20 token on Ethereum. The Ethereum blockchain is, of course, stupidly expensive to actually use for anything, because it\u2019s clogged to near-uselessness unless you\u2019re rugpulling on DeFi or selling cartoons of apes.<\/p>\n But that\u2019s okay, because all Novi customer funds will be custodied with Coinbase \u2014 no coins will move between the US and Guatemala, you\u2019ll just track your USDP coins that are held in Coinbase as numbers in Novi\u2019s database.<\/p>\n Novi’s Guatemala remittances pilot uses a blockchain-based stablecoin only in the sense of not using it at all.<\/span> As far as I can tell, the only thing the blockchain-based stablecoin does is let Facebook say they\u2019re using a blockchain-based stablecoin.<\/p>\n Marcus assures us that Novi still loves Diem: \u201cI do want to be clear that our support for Diem hasn\u2019t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live.\u201d<\/p>\n The Block\u2019s report from August on Diem<\/a> seems to have been entirely accurate about Facebook abandoning Diem for Paxos or USDC. This suggests the Block was also correct in reporting that the Diem Association is \u201ceffectively a zombie organization.\u201d<\/p>\n The Novi icons inside the Facebook mobile app used<\/i> to have the three-wavy-lines Libra\/Diem logo inside the letter \u201co.\u201d The wavy lines were removed in August in the app. [Twitter<\/i><\/a>]<\/p>\n Diem’s wavy lines have now also been removed from the Novi.com website, whose new headline is \u201cMove money instantly with no fees\u201d, and whose page title is now \u201cInternational Money Transfers & Remittances\u201d. [Novi<\/i><\/a>]<\/p>\n Novi is not active in the Facebook app as yet \u2014 but it\u2019s also just been added to the latest beta of WhatsApp. [WhatsApp Beta Info<\/i><\/a>]<\/p>\n After The Block\u2019s August story, David Marcus did an interview with Bloomberg in September.<\/a> He said that Novi would only abandon Diem as a \u201clast resort.\u201d Well, that didn\u2019t take long.<\/p>\n In response to Novi\u2019s plan to do remittances, five US Democratic senators \u2014 Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith \u2014 wrote a letter to Mark Zuckerberg asking that Facebook abandon the Novi wallet and the Diem cryptocurrency project.<\/p>\n The senators believe that Facebook \u201ccannot be trusted to manage cryptocurrency\u201d: [press release<\/i><\/a>]<\/p>\n On multiple occasions, Facebook has committed not to launch a digital currency absent federal financial regulators\u2019 approval.<\/p>\n … Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape \u2014 not only for Diem specifically, but also for stablecoins in general.<\/p>\n … In addition to the risks products like Diem pose to financial stability, you have not offered a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity.<\/p>\n … Time and again, Facebook has made conscious business decisions to continue with actions that have harmed its users and the broader society. 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. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.<\/p><\/blockquote>\n Schatz and Sherrod were two of the senators who got stuck into Libra in July 2019, helping mark that project\u2019s ignominious death<\/a> \u2014 despite it continuing to twitch for years after. (See Libra Shrugged<\/i><\/a>, chapter 10.)<\/p>\n Facebook and Novi have not responded \u2014 though Diem huffily replied that Diem is not Facebook<\/i>, and never mind that Facebook supplies 100% of the resources with which it can claim even as much existence as it exhibits. [Diem<\/i><\/a>]<\/p>\n The President\u2019s Working Group on Financial Markets have released their long-awaited report on stablecoins! [press release<\/a>; report<\/a>, PDF<\/em>]<\/p>\n The report is 26 pages and is quite readable and comprehensible. It recommends that Congress enact laws to require stablecoin issuers to be regulated in the manner of banks.<\/p>\n Particular threats the report notes include DeFi fraud \u2014 there\u2019s a whole sidebar on pages 8 and 9 about DeFi \u2014 market manipulations, systemic stability risks, and money-laundering and terrorist funding.<\/p>\n The report flags as an illicit funding risk \u201ccommercial firms such as telecommunications or technology providers\u201d \u2014 they \u201cincrease the potential that stablecoins scale rapidly.\u201d Hi, Facebook!<\/p>\n Facebook changed its name to Meta, which may achieve almost as much popular usage as Google\u2019s name change to Alphabet.<\/p>\n Every crypto moon boy has been tweeting and posting how the Metaverse \u2014 which, back in the early \u201890s, we still called \u201ccyberspace,\u201d because we only had William Gibson books and not Netscape yet \u2014 will be good news<\/i> for Web 3.0! Whatever \u201cWeb 3.0\u201d actually means, beyond trying to nickel-and-dime every breath you take online.<\/p>\n Zero of said moon boys are mentioning that Facebook already tried to do a crypto \u2014 and fell flat on their backsides.<\/p>\nBoss makes a Pax Dollar, I make a Diem<\/h3>\n
Senators to Facebook: knock it off<\/h3>\n
Report: stablecoin issuers will need to be banks<\/h3>\n
The Metaverse!<\/h3>\n
![\"Become](\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/10\/become_a_patron_button.svg\" "\\"Become")
<\/a>