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WhatsApp launches cryptocurrency payments pilot in the US

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With the Novi wallet and Pax Dollar stablecoin

WhatsApp has launched a new pilot that lets a “limited number” of people in the US send and receive money from within a chat using cryptocurrency. The feature is powered by Novi, Meta’s digital wallet that launched as a pilot six weeks ago, with payments made using Pax Dollars (USDP), a stablecoin pegged to the US dollar issued by Paxos. The news was announced by Novi’s incoming head Stephane Kasriel and WhatsApp’s Will Cathcart.

According to Novi’s website, sending a payment works much like sending any other attachment in WhatsApp. You access the feature via the paper clip icon on Android or the + icon on iOS, and then select “Payment” from the menu that appears. Novi’s site notes there are no fees for sending or receiving money, no limits on how often payments can be sent, and no fees to keep a balance in your Novi account or to withdraw it to your bank account. Payments are transferred instantly.

The Novi pilot was originally available in the US and Guatemala, but WABetaInfo notes that users in Guatemala won’t be able to access the new WhatsApp payments functionality. Instead, they’ll have to continue using the standalone Novi app. Payments do not affect WhatsApp’s end-to-end encryption, which is in place by default for all personal conversations. The WhatsApp Novi pilot is available in both English and Spanish.

The new pilot has its roots in Facebook’s (now Meta’s) much-hyped cryptocurrency plans, which were officially announced in 2019. At the time, Facebook (as part of the Libra Association) planned to develop and launch a cryptocurrency called Libra, which would be pegged to a basket of low-volatility assets rather than any one specific currency. This would integrate with a Facebook-developed digital wallet called Calibra. The whole system was designed to offer a way to send money around the world with lower fees than traditional methods.

These plans have shifted considerably since then. Libra has become Diem, the Libra Association has lost several of its most high profile members and become the Diem Association, and Calibra has become Novi. Perhaps most notably, Novi has ended up launching without the Diem cryptocurrency. Instead, Pax Dollars are the work of a separate company called Paxos, and Meta is relying on cryptocurrency exchange Coinbase as its custody partner.

Meta’s then head of Novi David Marcus said that the company is still committed to Diem when he announced the launch of the Novi pilot in October. “We intend to launch Novi with Diem once it receives regulatory approval,” Marcus tweeted. David Marcus subsequently said he was leaving the company at the end of the year. He has called the pilot of Novi in WhatsApp “the best farewell gift from the best team ever!

While WhatsApp’s US payment plans revolve around Novi and cryptocurrency, elsewhere in the world it’s already offering payments using traditional fiat currencies. The feature got a widespread rollout in India last year, and has also launched in Brazil.