Facebook has teamed up with US-based cryptocurrency marketplace Coinbase on a new project, Novi, which involves creating a digital wallet that allows people to send money internationally without the burden of additional fees. Novi has been operating for a long time, and will run pilot programs in the US and Guatemala – available to anyone in the US except those living in Alaska, Nevada, New York and the US Virgin Islands.
Novi will let people send USDP – a stablecoin pegged to the US dollar, which can then be withdrawn to the local currency of choice. In a blog post detailing the announcement, Coinbase explained that it is offering Novi its proprietary, completely separate cold storage capability for managing private keys called Coinbase Custody.
“Coinbase Custody is a leading crypto-native platform and custodian that securely manages $180 billion of crypto assets on its platform. Over the past nine years, Coinbase has developed deep expertise in the secure and scalable crypto infrastructure that we have developed. was initially built to power its own first-party application,” Coinbase said.
According to a statement, David Marcus, head of Facebook’s Novi project, chose USDP — also known as the Paxos Standard Stablecoin — because it is fully backed by USD and 100% in cash and cash equivalents. “What this means is that people can easily withdraw their money in their local currency,” he said.
Novi later plans to integrate with Diem – a Facebook blockchain-based payment system, though it is subject to pending regulatory approval. “Novi aims to always be interoperable,” Marcus said. “Imagine if you can’t send email from a Gmail address to a Yahoo address.”
Facebook reported that it decided to launch its cryptocurrency to cater to the unbanked population around the world. Facebook believes that using Novi can provide an efficient, cost-effective and successful alternative to remittances and day-to-day financial transactions.
US lawmakers unhappy with Facebook’s Novi Pilot announcement
Facebook’s plans for a greater crypto market may be in the right spirit, but lawmakers aren’t too happy with it. A group of US lawmakers said Facebook cannot be trusted to manage cryptocurrencies and urged the social media platform to immediately shut down a small pilot of its cryptocurrency wallet called Novi, which launched on Tuesday Was.
US Democratic Senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren and Tina Smith voiced their opposition to Facebook’s two-year-old effort to launch a cryptocurrency and digital wallet.