After a brief run as a remittance tool, Meta Platforms’ beleaguered stablecoin project is coming to an end.
The social media platform announced that the Novi digital wallet pilot will end on September 1, and advised all users to withdraw funds as early as possible. Deposits to the wallet will not be allowed after July 21, and users’ transaction history and other data will not be accessible from September 1.
The Novi app will be removed from the App Store. However, technology developed by Novi over the years will have a place in Meta’s metaverse plans, the company told Bloomberg it has already tested non-fungible tokens in its Web3 work.
Meta spearheaded its foray into digital currencies in 2018, spearheaded by David Marcus, who left the company in November 2021, and Morgan Beller, a former partner at Andreessen Horowitz.
Originally called Libra, the project was designed to help people store, transfer and spend money internationally for a tiny fee. Unlike Bitcoin, Libra will be backed by low-risk assets, including U.S. Treasuries and bank deposits.
The project attracted major early backers, including Uber, Spotify, Vodafone, Visa and Mastercard. To allay regulators’ concerns about the project’s ties to Facebook (Meta’s previous name), Marcus and Beller created the Libra Foundation in Switzerland, of which Facebook is a member.
But Marcus was snubbed in 2019 when he tried to lure Washington regulators. Leading politicians expressed distrust of Facebook, and soon, some early supporters began to pull out.
Soon after, Libra was renamed Diem, while Facebook’s digital wallet (previously known as Calibra) was renamed Novi.
Diem said the dollar will support the new eponymous currency. A pilot is planned for spring 2021, with a small release of Diem and the launch of Novi.
But the U.S. Treasury Department said “no,” and Marcus then launched a Novi wallet pilot using the stablecoin Paxos (USDP) in October 2021, with plans to migrate to the Diem payment network.
The latter never materialized, and Diem’s assets were sold to Silvergate Capital in January. Silvergate will launch its stablecoin project using Diem’s assets later this year.
WhatsApp payments set to disabled
Novi Wallet caters to users in the US and Guatemala. Local currency can be purchased with a debit card and sent to the wallet, where it is then stored in USDP. From there, users can send funds to another wallet. The recipient can withdraw money in their local currency.
Meta has since launched Novi for WhatsApp in the US, which enables payments through encrypted chats.
Novi will no longer be available on WhatsApp after the September 1st deadline.
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