The association took particular issue with a claim that there has not been “a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity.”
Diem has pushed back against a strongly worded letter from U.S. politicians — insisting that they have misunderstood the relationship that the association has with Facebook.
Earlier this week, Democrats had called for the tech giant to abandon its plans to trial the Novi crypto wallet in a partnership with Coinbase. They had written:
“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.”
But in a statement, Diem stressed that it is an independent organization — and that Facebook’s Novi only represents one of more than two dozen members.
The response also noted that the Novi trial will be in association with Paxos, meaning that Diem’s stablecoin will not end up being used. It added:
“Diem’s blockchain-based payment system has been purpose-built for payments, and that is why we have prioritized consumer safety, financial stability, and combating financial crime. Furthermore, our independence is designed to foster competition and interoperability in payments.”
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Diem’s Defense
The association took particular issue with a claim that there has not been “a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity.” It said:
“To the contrary, the Treasury Department’s Financial Crimes Enforcement Network has provided positive feedback on Diem’s financial crime compliance framework, and we believe we have the most robust controls in the industry.”
Diem added that these controls include ensuring that anonymous transactions cannot take place with unhosted wallets, and said:
“When Diem comes to market we will do so having reflected the feedback of regulators from around the world and with confidence that Diem’s payment system is secure, will protect consumers, and will combat financial crime.”
