After the failure of its Libra project, Facebook is returning to the world of cryptocurrencies. With this time, a crypto wallet that responds to the name of Novi.
If the launch is still in the testing phase, the announcement will not have failed to make noise within the cryptosphere. Because in particular this partnership involves two behemoths: the Coinbase platform and the social network Facebook.
Focus on the Novi portfolio
For now, this portfolio remains in its testing phase. A phase only accessible since the day before yesterday to a very small number of users in the United States and Guatemala. Since that date, users can deposit money on the wallet using a debit card. The wallet puts at the heart of its architecture the Pax Dollar (USDP), the dollar-backed stablecoin of the company Paxos.
For Facebook, the choice of Paxos and its USDP meets its qualities, particularly with regard to consumer protection. The partnership foresees that it is the Coinbase platform that keeps the funds deposited by the customers. A task that should not pose a problem for the company and its more than $ 180 billion in funds under management.
Among the features, the Novi wallet will also allow interaction with other crypto wallets.
Facebook remains on regulators’ radar
In recent years, the group has had to deal with data breach scandals several times. On this point, seeing the Facebook group associated with financial services frightens a number of regulators and policy makers.
The American giant, the fourth largest capitalization in the S&P 500 stock market index, is aware of this. In an official note, the group makes it known that the accounts of Facebook and Novi will be clearly separate entities. The group also emphasizes protocol security. These statements were obviously not enough to dispel the questions of the regulators. Several hours after Facebook’s announcement, some policymakers were already calling for the project to be canceled. Arguing in passing the various scandals that Facebook has already had to face and presenting the launch as “risky for the financial stability of the United States”.
Sadly, Facebook’s decision to pursue a digital currency and payment network is just one more example that shows the business is moving too fast. Facebook cannot be trusted to run a payment system or digital currency when its current ability to manage risk and keep network consumers safe has proven to be woefully inadequate. We urge you to immediately stop your Novi pilot project and make a commitment not to commercialize Diem.
Novi: What does that change?
In a statement, Facebook also notified its willingness to launch its crypto wallet for address as a priority the nearly 2 billion people in the world who do not have access to a bank account. The fame of the actors involved in this project could also lead one to think of a massive adoption of the wallet. For this, the first results of the test phase will be eagerly awaited.
The group also makes it known that it has not given up on its wish to launch its own blockchain. The Diem project is therefore far from being in the works. Teams work both on technical aspects but also on compliance with regulatory constraints. Because for that, it will be necessary to succeed in convincing the American regulators. Another kettle of fish for Mark Zuckerberg’s group.
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