Facebook tests cryptocurrency wallet Novi with Coinbase and Paxos

Social media giant Facebook turned to Coinbase and Paxos for its next digital wallet project, Novi, which began its pilot testing phase in the US and Guatemala on Tuesday.

From October 19th a small group of users in both countries can download the Novi digital wallet app on iPhone or Android devices and use a debit card to deposit funds into their account. From there, they can send and receive money using Pax Dollar (USDP), a dollar-backed stablecoin issued by the blockchain trust company Paxos.

Facebook selected USDP in its pilot program because of its proven track record and “important features of consumer protection and regulation”. Since the USDP reserves are fully covered by cash, Novi users can withdraw their money in their local currency.

Facebook tests cryptocurrency wallet Novi with Coinbase and Paxos
Facebook tests cryptocurrency wallet Novi with Coinbase and Paxos

Client funds are guarded by Coinbase, which manages $ 180 billion in assets.

A Facebook spokesperson told Cointelegraph that the pilot phase will allow Facebook to evaluate the wallet’s core functions and demonstrate operational capabilities, particularly in terms of customer service and compliance.. Novi is also being developed to be interoperable with other digital wallets.

The spokesman also claimed the company has not given up support for Diem’s ​​network, a permissionless payment system still awaiting a green light from Washington. “We intend to bring Novi to market with Diem as soon as it gets regulatory approval and goes live,” they said.

Despite considerable lobbying powers in Washington, Facebook has encountered obstacles in convincing top policy makers to hand over Diem. The proposed payment network has gone through several design iterations since 2019, but concerns about money laundering and stablecoins have slowed the approval process.. As Cointelegraph reported in September, some of the design changes have encouraged policy makers.

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