Meta to Shut Down Novi Crypto Wallet in September

Meta Platforms Inc, formerly Facebook Inc, has announced to shut down its Novi cryptocurrency digital wallet on September 1st.

The latest announcement follows by advising users to make withdrawals of their funds as soon as possible, according to the Meta.

The social technology firm notified that starting on July 21, users won’t be able to add funds to their accounts. Once the pilot program of Novi wallet ends, users will not have access to their transaction history and other data. Furthermore, Novi’s WhatsApp account and the Novi app would become unavailable, the company stated.

However, Meta said that it will try as much as possible to transfer any remaining money to customer debit cards and bank accounts after the last day of Novi’s operation.

The shutdown of the Novi wallet will mark the end of the Libra stablecoin experiment three years after Facebook launched its ambitious plans.

Though Meta decided to end the Novi pilot project, the firm mentioned that it has plans to repurpose the technology for future products, including its metaverse initiative.

In an emailed statement, Meta said: “We are already leveraging the years spent on building capabilities for Meta overall on blockchain and introducing new products, such as digital collectables. You can expect to see more from us in the Web3 space because we are very optimistic about the value these technologies can bring to people and businesses in the metaverse.”

Meta has already started exploring efforts to support non-fungible tokens (NFT) on its platforms.

Regulatory Woes

In October last year, Novi, Facebook’s digital wallet, launched a pilot program to test the functionality of the service in two countries, the US and Guatemala. The test enabled Novi to test all of its major functions and to assess things required to be improved before the launch of the cryptocurrency wallet. Novi used Pax Dollar stablecoin as the main currency during the test, with the aim to launch the Diem stablecoin digital currency once it gets greenlighted by Washington regulators.

The pilot program allowed users in both nations to download the Novi digital wallet app for Android or iOS devices and fund their accounts with a debit card. The wallet allowed them to send and receive Pax Dollars (USDP), a stablecoin issued by Paxos.

Soon after Facebook launched its Novi wallet pilot, high-profiled US senators led by Elizabeth Warren, including Brian Schatz, Tina Smith, Richard Blumenthal, and Sherrod Brown, called for the immediate closure of the crypto wallet. The five senators sent a letter to Mark Zuckerberg, Facebook’s founder and CEO, stating their concern regarding the ability of the social media company to combat money laundering, protect consumers, and monitor other security and financial risks. The lawmakers voiced their fierce opposition to Facebook’s revived effort to launch crypto and digital wallet.

In November last year, David Marcus, the leader of Meta's financial technology unit Novi, departed his role after seven years with the company.

In February this year, Diem's CEO Stuart Levey, who took over Marcus's role leading Novi and other payments projects, announced the end of Diem dream due to continued resistance from federal regulators. Levey announced the sale of Diem's assets, which were bought by crypto-oriented bank Silvergate Capital for $200 million.

Image source: Shutterstock