Novi, Facebook’s Digital Wallet, Is Now Available & Powered By The Paxos Stablecoin
Facebook is officially launching a pilot test of its Novi digital wallet in the United States and Guatemala, more than two years after the service was first announced to the public.
In partnership with Coinbase, The Paxos stablecoin will allow users to transfer and receive money instantly, securely, and without fees. Coinbase will be serving as the custody partner that holds the actual funds for the pilot test.
The trial is meant to test critical feature functionality, as well as operational capabilities in customer service and compliance, according to Facebook’s David Marcus, CEO of Facebook Financial. He also stated the need to demonstrate that stablecoins are a viable payment alternative.
The most apparent thing from the announcement is that Novi is starting without its most crucial feature, the Facebook-backed Diem cryptocurrency, which was supposed to act as the project’s foundation.
Facebook’s Diem Cryptocurrency Long Journey
It was once called Libra, but the name was changed to Diem in an attempt to distance the new innovation and its managing company from Facebook. Diem, however, is still waiting for regulatory approval and has yet to debut its coin in any jurisdiction until this time.
When Libra was first disclosed to the media, it garnered a lot of negative publicity, and a number of significant partners including PayPal, Visa, Mastercard, eBay, Stripe, and Mercado Pago dropped out within a few months of its inception.
The company transferred its operations back to the United States in recent months after being forced to abandon its efforts to obtain regulatory approval for its stablecoin in Switzerland.
Earlier this year, the media reported that Diem aims to deploy only a single, US-based stablecoin connected to the dollar rather than the broader scope the business had initially planned.
However, after the announcement revealed that the stablecoin was not in Novi’s test, it may indicate that it is still in its development phase.
Coinbase Share Price Increased After Deal With Facebook
The cryptocurrency exchange company Coinbase Global saw its stock price rise on October 19 after the announcement that it will store funds from Novi digital wallet.
Facebook claims that this will allow users to convert local currencies into cryptocurrency through a stand-alone app that integrates with other Facebook products such as Instagram.
Coinbase Global shares were up more than 3% on October 19, trading at around $303 per share, a move that would still leave the stock roughly 30% behind its post-IPO high of $429 reached earlier this year.
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