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Payments would be better with crypto. Marcus says that allowing users to pay with dollars, euros and other fiat currencies via the Novi wallet would bring a lot of value. “So why not just do that and call it a day?” he writes. “Well, we might,” he says, but before deciding on that, he doesn’t want to “waste our shot” at incorporating stablecoins into an “open, interoperable protocol” for online payments. “To have the maximum impact, building a closed system using fiat only wasn’t going to cut it,” he writes.
Crypto advocates say blockchain technology allows for products that eliminate middlemen, credit checks and fees and allow people excluded from traditional financial services to transact anytime, anywhere. Marcus says that a well-designed stablecoin pegged to a fiat currency, backed one-to-one in cash reserves, would offer strong consumer protections. It would also be quicker to access funds than traditional bank accounts.
In practice, regulators are wary of stablecoins. A New York attorney general investigation of the popular stablecoin Tether found that the company minted tokens without reserves to back them. In recent weeks, the Treasury secretary, Janet Yellen, the S.E.C. chair, Gary Gensler, and Senator Elizabeth Warren have all expressed concerns about the crypto tokens.
What happens next? “We will continue to persevere and demonstrate we can be a trusted player in this industry,” Marcus writes. The Novi wallet has licenses or approvals in nearly every U.S. state and the Diem stablecoin project “has addressed every legitimate concern,” he adds. Facebook’s digital wallet is ready to come to market, Marcus says, and “we deserve a fair shot.” Judging by Facebook’s difficulties getting to this point, regulators remain to be convinced.
HERE’S WHAT’S HAPPENING
Early data hint at a rise in “breakthrough” coronavirus infections. Preliminary numbers in some states showed that vaccinated people accounted for at least one in five new diagnosed cases, and for a higher percentage of hospitalizations and deaths than previously reported (though the absolute numbers remain very low). Gov. Greg Abbott of Texas, who has challenged mask and vaccine mandates in court, tested positive for the coronavirus yesterday. He is fully vaccinated and has no symptoms, his office said.
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