Following the demise of its controversial cryptocurrency project, Meta has announced that it would no longer be testing its digital wallet, Novi. Users will no longer have access to their accounts beginning in September. Also, beginning on July 21st, they will no longer be able to deposit money to their Novi accounts. Meta says it will try to transfer funds to a bank account or debit card if someone forgets to withdraw their remaining balance.
Novi’s journey through a cul-de-sac
Meta launched Novi in beta form in October of last year with the assistance of cryptocurrency trading firm Coinbase. Novi was originally designed to facilitate quick and cheap transactions using the Meta-backed cryptocurrency Diem. However, regulatory issues caused the firm to join with Coinbase and employ the Paxos stablecoin (USDP) instead. To secure customer assets, Coinbase introduced a type of digital storage and technology. Novi wanted to make it possible for people to transfer money to each other using an app or over Facebook Messenger or WhatsApp.
Meta’s shutdown of Novi comes a few months after its precursor, Diem (formerly Libra) failed to take off. The Novi pilot, was significantly less complicated. It allowed testers to make fast, fee-free personal payments. However, the strategic failure of Novi faced regulatory issues and global government scrutiny. Users’ wallets containing credits would be subject to money-transmitter restrictions if they relied on stored-value accounts like PayPal.
Meta’s plans to deploy a cryptocurrency in the metaverse seem to have hit a pause with the cancellation of Novi. Nonetheless, the company is still working on a substitute. For instance, for select US-based creators, Meta has just begun testing NFTs on Instagram and has recently made NFT support available on Facebook. The crypto market is currently struggling and NFTs at a yearly low. Therefore, it remains to be seen how Meta will wade through the Waters.