Meta is Pulling the Plug on its Crypto Payments Wallet, Novi
July 05, 2022
By announcing on Friday that Novi, the digital wallet payments system created in October, will cease on September 1st, Meta has announced a further reduction in its role. This comes three years after Facebook revealed the Libra project, a foolish attempt to enter the cryptocurrency space.
In a statement emailed to CoinDesk, the tech titan now known as Meta stated that it has plans to repurpose the digital wallet technology (formerly known as Calibra) for upcoming products, particularly those tied to its eponymous focus on "metaverse" development. Even yet, what Meta has in mind when using the Novi technology is not entirely clear.
It is interesting to note that Senior Meta executives have hailed the metaverse as a significant possibility for online trade. However, they have also cautioned about the extended time frames needed to build the desired market, stating that it may take decades.
The company has been testing support for non-fungible tokens (also referred to as NFTs) in recent months, so if it decides there is enough money to be made there, Meta could support a wider push into non-fungible token trading (although, again, NFT trading volumes are steeply down vs last year — as digital collectables catch the chill of crypto).
It is interesting to note that, while the Novi pilot was much more straightforward, Meta's marketing claimed that their technology made sending money "as easy as sending a message." Testers could transmit fee-free, instant personal payments utilising the Novi app and a stablecoin as the transfer medium. Only users from the US and Guatemala could participate in the pilot.
For a select group of US users of the Facebook-owned messaging app, WhatsApp, a limited integration was also launched in December.
Meta's crypto objectives, however, never materialised as predicted in the face of governmental resistance and wilting support, which ultimately hurt the wallet project.
It's fair to say that Facebook's brand problems, brought on by years of governance scandals, limited its capacity to "move fast and break things." At the same time, crypto raised the stakes for regulatory worries about money laundering and currency instability.
As a result, Novi was already toned back from its original goals at debut. For instance, it now uses USDP as a stablecoin rather than Diem, the coin tied to the Libra project itself.
David Marcus, who handled Novi and announced his departure in November, resigned more recently, and his resignation was posted on the wall for the digital wallet. Marcus was the chief crypto executive of Meta.
Then, in January, the Libra/Diem Association, or the consortium that Meta had been formed to support and guide the cryptocurrency project, stated that it was closing down and selling off the Diem stablecoin's assets. Also known as Game over.
Novi's announcement of the impending termination of the payment pilot on its website provides no background or explanation for Meta's decision to yank the plug, with the tech giant only writing:
"Novi makes no mention of the reasons for Meta's decision to pull the plug in its online notification of the upcoming conclusion of the payment experiment, instead just writing."
Meta's interest, though, is undoubtedly waning as economic conditions alter. For instance, there is no discussion of the overall collapse of the cryptocurrency market, which prompted massive sell-offs and increased scrutiny of stablecoins due to stability issues. Additionally ignored was the growing concern over international regulation of bitcoin.