Facebook has teamed up with Coinbase, a cryptocurrency exchange located in the United States, on a new project called Novi, which aims to create a digital wallet that allows individuals to move money abroad without incurring additional costs. Novi has been in the works for a long time and will be launching trial programs in the United States and Guatemala. Anyone in the United States will be allowed to participate, with the exception of residents of Alaska, Nevada, New York, and the US Virgin Islands.
Novi would let users transfer USDP, a stablecoin tied to the US dollar’s price, which can subsequently be withdrawn in their preferred local currency.
Coinbase said in a blog post about the launch that it is providing Novi with Coinbase Custody, it’s unique, completely segregated cold storage solution for storing private keys.
“Coinbase Custody is a prominent crypto-native platform and custodian with $180 billion in crypto assets under management. Coinbase has established extensive experience in safe and scalable crypto infrastructure over the last nine years, which we first created to power our own first-party products “According to Coinbase.
According to a release, David Marcus, the leader of Facebook’s Novi project, picked USDP — also known as Paxos Standard stablecoin — since it is fully guaranteed by the US dollar and held entirely in cash and currency equivalents. “This implies that people may withdraw money in their local currency whenever they want,” he explained.
Novi intends to link with Diem, a Facebook blockchain-based payment system, in the future, but regulatory permission is still waiting. “Novi’s objective has always been and will continue to be interoperability. Imagine being unable to send an email from a Gmail account to a Yahoo account “Marcus went on to say.
Facebook stated that it chose to create its cryptocurrency in order to reach out to the world’s unbanked population. Facebook believes that using Novi for remittances and day-to-day financial transactions may be an efficient, cost-effective, and successful option.
Facebook’s Novi pilot announcement has angered US lawmakers.
Facebook’s plans may be in the best interests of the crypto market as a whole, but legislators aren’t pleased. Facebook cannot be trusted to manage cryptocurrencies, according to a group of US legislators, who have asked the social media platform to immediately halt a limited trial of its bitcoin wallet, Novi, which was introduced on Tuesday.
Senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith of the United States of America have expressed their objection to Facebook’s two-year-old attempt to establish a cryptocurrency and digital wallet.