Facebook at last start putting it up A “small demo” of its Novi digital wallet is today in the US and Guatemala, more than two years after it was first announced. The pilot will allow users to send and receive money “instantly, securely, and without fees” using the Paxos stablecoin, in partnership with Coinbase (which will act as the custodian partner that holds the actual funds for the pilot).
According to David Marcus of Facebook, President of F2 (Facebook Financial), the pilot goal is to “test core feature functionality and operational capabilities in customer care and compliance,” as well as attempt to demonstrate the practical use of stablecoins for payments.
Remittances are an important means of achieving financial inclusion. Today, we are rolling out a small demo of a program @new Digital wallet application in two countries – the United States and Guatemala. Individuals can send and receive money instantly, securely and without fees. 1/8
– David Marcus (@davidmarcus) October 19 2021
Most notable, however, is the fact that Novi is launching without its biggest feature: the Facebook-backed Diem coin that was supposed to be a cornerstone of the project. Diem was formerly known as Libra, before changing the name in an effort to distance the now-independent group from Facebook, which it initially started. But Diem is still facing regulatory approval and has yet to launch its cryptocurrency in any country.
Libra came under fire when it was first announced, with several major partners (including PayPal, Visa, Mastercard, eBay, Stripe, and Mercado Pago) pulling out of the project just a few months after it was announced. The company recently moved its operations back to the United States after halting plans to obtain regulatory approval for its stablecoin in Switzerland. CNBC reported earlier this year that Diem is planning to launch a single US-based stablecoin pegged to the dollar (instead of the broader scope the company had originally planned), but it tells us that the token wasn’t ready for Novi’s trial today.
In his announcement, Marcus noted that Novi remains committed to Diem and will launch with the cryptocurrency when it goes live. However, the announcement does not provide any update on when this will happen.
However, today’s launch determines how much Novi and Diem’s reach and scale have been reduced since Facebook’s original announcement, and how far the company has to go to achieve its goal of creating a truly mainstream cryptocurrency.