Stablecoin projection Diem has distanced itself from Facebook in response to senators calling for the immediate cessation of the firm's Novi crypto wallet.

Diem also claimed senior regulators had called it "the best-designed stablecoin project that the U.S. regime had seen."

In a Tuesday letter sent to Facebook CEO Mark Zuckerberg, the senators, including crypto critic Elizabeth Warren, voiced their "strongest opposition to Facebook's revived effort to launch a cryptocurrency and digital wallet."

Before that day, the Novi wallet was launched in partnership with Coinbase, with a pilot in the United States and Guatemala to enable users to buy, send and receive Pax Dollars (USDP) through their Novi account.

Diem's response to the alphabetic character stated the senators had misunderstood the "relationship between Diem and Facebook" while as well distancing itself from the Novi wallet pilot:

"Diem is non Facebook. We are an independent organization, and Facebook'southward Novi is merely i of more than two dozen members of the Diem Association. Novi's pilot with Paxos is unrelated to Diem."

While technically true, the argument may not be enough to squash the concerns of the U.South. senators.

Diem was formerly known as Libra and has strong ties to the social media behemothic, as the stablecoin project was initially proposed by Facebook in 2022, and Facebook fiscal head David Marcus is also a co-founder and a board member of Diem.

In their letter, the senators asserted that Facebook "cannot exist trusted," as the house has fabricated several moves that ultimately "harmed its users and the broader society." It also said there has non been "a satisfactory explanation for how Diem volition prevent illicit financial flows and other criminal activity."

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Diem defended itself by challenge it has the "virtually robust controls in the industry."

"Across fiscal crime compliance, nosotros engaged extensively with an inter-agency regulatory team about the design of the projection. As part of that review, we made adjustments to reverberate feedback we received, and we were informed past a senior regulator that Diem is the best-designed stablecoin project that the U.S. regime had seen," Diem said.

Diem concluded by saying that when the stablecoin project finally launches, information technology volition do so with "confidence that Diem'southward payment system is secure, will protect consumers, and volition combat fiscal criminal offence."