Facebook is finally launching a “small pilot” of its Novi digital wallet in the United States and Guatemala after more than two years of planning. The pilot program, developed in collaboration with Coinbase, will enable users to send and receive money “instantly, securely, and without fees” using the Paxos stablecoin (which will be serving as the custody partner that holds the actual funds for the pilot).
The pilot is intended to “test core feature functions and operational capabilities in customer care and compliance,” according to Facebook’s David Marcus, head of F2 (Facebook Financial), as well as to demonstrate a viable use of stablecoins for payments.
“Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the @Novi digital wallet app in two countries — the US and Guatemala. People can send and receive money instantly, securely, and with no fees” According to David Marcus (@davidmarcus) October 19, 2021
The most notable difference is that Novi is launching without its most important feature: the Facebook-backed Diem cryptocurrency, which was supposed to be the project’s cornerstone. Diem was previously known as Libra before its name was changed in an effort to distance the now-independent group from Facebook, which was responsible for its inception. Diem, on the other hand, is still awaiting regulatory approval and has yet to launch its cryptocurrency in any country.
Libra came under heavy criticism when it was first announced, with multiple major partners (including PayPal, Visa, Mastercard, eBay, Stripe, and Mercado Pago) all pulling out from the project just a few months after it was announced. The company recently moved its operations back to the US after halting plans to get regulatory approval for its stablecoin in Switzerland. CNBC reported earlier this year that Diem plans to launch just a single, US-based stablecoin tied to the dollar (instead of the broader scope the company had originally planned), but it’s telling that the token wasn’t ready for Novi’s pilot today.
Marcus does state in his announcement that Novi remains committed to Diem and will launch with the cryptocurrency when it becomes available. However, there is no indication of when this will occur in the announcement.
The launch today, on the other hand, demonstrates how much Novi and Diem have shrunk in scope and scale since Facebook’s initial announcement, and how far the company still has to go to achieve its goal of becoming a truly mainstream cryptocurrency.
