• Tue. Aug 2nd, 2022

Meta will end the Novi digital currency project on September 1

ByHazel R. Lang

Jul 5, 2022

Diving brief:

  • Meta is closing its Novi digital wallet pilot on September 1, the company announced on its website Friday.
  • Users will no longer be able to add money to their accounts starting July 21, Novi said. Beyond that, users will lose access to their transaction history and other data after the pilot ends. The service’s website provides pilot participants with instructions on how to upload this information and withdraw their funds prior to the Novi application and Novi’s presence on WhatsApp are disabled.
  • The social networking company formerly known as Facebook told Bloomberg that it plans to use Novi’s technology in future projects. “We are already building on years of building Meta’s overall blockchain capabilities and introducing new products, such as digital collectibles,” Meta told the news service in a statement. “You can expect to see more from us in the Web3 space, as we are very optimistic about the value these technologies can bring to people and businesses around the world. metaverse.”

Overview of the dive:

The end of the Novi pilot appears to represent a final step back for Meta from the Libra project once intended to create a cryptocurrency backed by a basket of currencies. The effort, announced in 2019, prompted an almost immediate pushback from lawmakers concerned about the risk of money laundering and terrorist financing through one of the world’s largest companies.

The drumbeat of senators’ warnings may have helped persuade some of Libra’s early backers, such as Visa, Mastercard and Stripe, to withdraw their support. The project struggled to find a regulator who would work with it – even as it scaled back its ambitions and rebranded itself.

The new Diem Association has withdrawn its application for a payment system license from Swiss regulator Finma, opting instead to move its main activities to the United States and try to register as a money services business with the Financial Crimes Enforcement Network (FinCEN).

Even when the Novi pilot was launched last October – as an experiment in transferring money between users in the United States and Guatemala and without the Diem stablecoin that was supposed to be its centerpiece – US senators urged the company to ‘immediately abort’ the pilot and ‘engage’. that you don’t bring Diem to market. The Novi pilot used the Paxos Dollar stablecoin and relied on Coinbase to provide custodial services.

“Time and time again, Facebook has made conscious business decisions to pursue actions that have harmed its users and society at large,” five Senate Democrats wrote in October.

A few weeks after the pilot’s launch, Diem co-creator David Marcus said he would be leaving Meta. Marcus has since founded Lightspark, a startup that develops payment technology that runs on top of the Bitcoin blockchain, according to Protocol.

Silvergate Bank agreed in January to buy the assets and intellectual property of Association Diem for $182 million and said at the time that it aimed to launch a stablecoin this year using those assets through existing technology. form the bank.

Novi was supposed to act as an umbrella for all of Meta’s financial products, including Facebook Pay. But this year, the social networking company began to move away from the Novi name in favor of the parent brand. Meta Financial Operations became Meta Financial Technologies in March and Facebook Pay became Meta Pay in June.

The end of the pilot comes as several crypto platforms suffered precipitous declines in value and Treasury Department officials and regulators continue to debate how to oversee the stablecoin space.


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