Facebook releases its own rebranded digital cryptocurrency wallet called Novi on Tuesday and would initially go live in Guatemala and the United States. The pilot program will be using the Paxos Dollar (USDP) instead of the Diem digital currency. The program is now live at this time, and users can begin trading with it in Paxos Dollar. Cryptocurrency company, Coinbase will be providing custody services for the Novi platform. However, the company plans to migrate Novi to the Diem payment system as soon as it gets regulatory approval.
Facebook’s Novi aims is to help family members send out and get money from overseas directly. Novi uses digital currencies that make sending money as easy as sending a message on mobile. Money transfers between wallets would be free of charge. Users could simply download the app on iOS and Android phones, and everyone can register using any government-issued ID. In Novi, a 1 USDP is equal to 1 US dollar. Individuals will send Paxos Dollar USDP, but their receivers can withdraw the money in their local currency. Additionally, they can choose to keep the money in their Novi balance. Recipients can also withdraw by picking up cash at a nearby location or transferring it to their bank account. However, these options vary by country.
David Marcus, head of Facebook Financial, stated this “test pilot would test core feature functions” and their operational capabilities in customer care and compliance. Marcus also stated that the remittance corridor between these two countries was very important because most Guatemalans lack access to financial services but have access to a smartphone. The company also said further that they have chosen USDP so they can test their systems. USDP is a firmly established coin that has been in operation successfully for over three years that has important regulatory and consumer protection attributes.
The fact that Novi is finally launching, even on a small
pilot program, seems to be a significant step forward for Facebook’s
long-troubled crypto plans. The company though is launching the digital wallet
minus Diem, its planned cryptocurrency (previously called Libra) that is facing
a wave of pushback from lawmakers and regulators around the world.