Facebook is finally starting to roll out a “small pilot” of its Novi digital wallet today in the US and Guatemala, more than two years after it was first announced. The pilot program will let users send and receive money “instantly, securely, and with no fees” using the Paxos stablecoin, in partnership with Coinbase (which will be serving as the custody partner that holds the actual funds for the pilot).
According to Facebook’s David Marcus, the head of F2 (Facebook Financial), the pilot is meant to “test core feature functions, and operational capabilities in customer care and compliance,” in addition to trying to demonstrate a viable use of stablecoins for payments.
Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the @Novi digital wallet app in two countries — the US and Guatemala. People can send and receive money instantly, securely, and with no fees. 1/8— David Marcus (@davidmarcus) October 19, 2021
Most notably, though, is the fact that Novi is launching without its biggest feature: the Facebook-backed Diem cryptocurrency that was meant to be the cornerstone of the project. Diem was formerly known as Libra, before the name was changed in an effort to distance the now-independent group from Facebook, which initially started it. But Diem is still facing regulatory approval and has yet to launch its cryptocurrency in any country.
Libra came under heavy criticism when it was first announced, with multiple major partners (including PayPal, Visa, Mastercard, eBay, Stripe, and Mercado Pago) all pulling out from the project just a few months after it was announced. The company recently moved its operations back to the US after halting plans to get regulatory approval for its stablecoin in Switzerland. CNBC reported earlier this year that Diem plans to launch just a single, US-based stablecoin tied to the dollar (instead of the broader scope the company had originally planned), but it's telling that the token wasn’t ready for Novi’s pilot today.
Marcus does note in his announcement that Novi is still committed to Diem and will launch with the cryptocurrency when it does go live. The announcement doesn’t give any update on when that will be, though.
The launch today, however, establishes just how much Novi and Diem have been reduced in scope and scale since Facebook’s original announcement, and how far the company has to go to achieve its goal of a truly mainstream cryptocurrency.