Facebook launches digital currency wallet Novi

TECHDIGEST – Facebook has launched a long-awaited pilot of its digital currency wallet Novi in the US, but has chosen to use the Paxos Dollar stablecoin after its own cryptocurrency Diem failed to get backing from regulators.

In a blog post on Tuesday, David Marcus, head of Facebook’s Novi wallet, announced that the company had started the pilot in parts of the US, as well as Guatemala.

Users could download the app on iPhones or Android and register with a government-issued ID, said Marcus, adding that transferring money between wallets would be free. Coinbase, the US cryptocurrency exchange, is providing custody services for Novi.

Andreessen Horowitz, the venture capital firm, is an investor in Coinbase, and Marc Andreessen, its co-founder, sits on Facebook’s board.

The decision by Facebook to use an existing stablecoin rather than Diem, which Novi was originally designed to hold, reflects the difficulties in getting the latter Facebook-initiated project off the ground.

The sector as a whole has faced questions over consumer protection, money laundering and monetary stability. But regulators have expressed particular concerns over the scandal-hit social media giant operating its own currency since it announced the initiative in 2019, alongside a group of backers that include tech businesses and non-profit organisations.

 

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