Facebook partners with Coinbase to launch Novi cryptocurrency wallet amid regulatory rejection

Facebook partners with Coinbase to launch Novi cryptocurrency wallet amid regulatory rejection

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Answer Facebook partners with Coinbase to launch Novi cryptocurrency wallet amid regulatory rejection

Facebook has not given up in its quest to harness the power of the blockchain to expand into the financial business.

After the failure of its Libra project, the social media giant announced a partnership with Coinbase to launch the crypto wallet Novi.

The launch is still in the testing phase.

According for an official statement From David Marcus, President of Novi, Facebook will launch a beta version of Novi available to a small group of people who intend to test the strength of its service.

Facebook, Coinbase and Paxos collaborate to service the Novi wallet:

The Novi service will be available to the United States (excluding Alaska, Nevada, New York and the US Virgin Islands) and Guatemala, a small Latin American country located in Central America.

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Novi will allow users to send and receive Pax, a US-regulated stablecoin backed by cash reserves and cash equivalents.

The funds will be held by Coinbase’s Custodial and Storage branch, and users will be able to exchange their Pax for fiat currency instantly.

Facebook explains that it has decided to launch its cryptocurrency to meet the needs of the unbanked population, a segment of 1.7 billion people worldwide.

Facebook believes that using Novi can provide a cost-effective and successful alternative to transfers and everyday financial transactions.

Additionally, Facebook confirmed that they have not given up on their dream of launching their own blockchain project.

Facebook also confirmed that in addition to the technical aspects, they are working to meet all legal requirements to obtain a green light from the US authorities and migrate all of their services to Diem, a native blockchain that was born as a kind of evolution of the Libra project.

The organizers and the Facebook project “Diem”:

Facebook’s road to the crypto-currency highway has been bumpy.

The project came right after trust in Facebook was shaken, following the Cambridge Analytica scandals and other massive leaks of personal data, which sounded the alarm among regulators who were keen to curb any attempt to mix Facebook with financial services.

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Facebook is aware of this, and in the same official note posted, they confirmed that the Facebook and Novi accounts are separate and that the wallet is built with a focus on security.

As a quote from the published statement:

We know that privacy is a top priority for Novi customers, so you will always be our top priority.

We prioritize the security and privacy of people’s information by encrypting sensitive financial information… If we determine that a transaction is unauthorized, we refund the full amount to someone’s Novi Balance.

People’s Novi accounts and Facebook accounts are separate.

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But this was not enough for some regulators such as “Elizabeth Warren” and a committee of 4 other members of the Senate who were already calling on Facebook to cancel the project a few hours after it was announced.

Diem responded by issuing a statement saying that Diem was a separate entity from Facebook, that the Facebook initiative was not linked to Diem, and that a senior regulator said Diem was the best cryptocurrency stable project the US government had seen.

The issue of creating a “Novi” wallet remains wide open, waiting for the next step from Facebook or the regulators.

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