Facebook have launched Novi, its digital wallet for cryptocurrencies on Tuesday (19th Feb) and has tapped Coinbase to be its custody partner, consistent with an advertisement.
The custody arm of Coinbase will support Novi by keeping funds secure when users’ sign-up for the pilot program, which is now available in US & Guatemala. Through Novi, users will be able to transfer money abroad instantly & with no fees.
Coinbase custody, with its cold storage capability for managing private keys, is a good & qualified custodian and managed $180 billion of crypto assets on its platform as of June 30th, 2021.
Novi users will be able to transact paxos dollar, or USDP, a stable-coin created in 2018, whose worth is pegged to US dollar. USDP ranked 100th on the CoinMarketCap as of Tuesday with a worth of $946 million. Tether, the largest stable-coin, is ranked 5th overall with a market capitalization of $69 billion.
David Marcus, the head of Novi, chose USDP because it’s completely backed by the US dollar and is held 100 percent in cash & cash equivalents, consistent with a statement. “This means that people can simply withdraw their money in their local currency when they choose,” he added.
Novi then plans to unite with Diem, a Facebook blockchain-supported payment system, pending regulatory approval. “The goal of Novi has been & always will be to be interoperable,” Marcus added. “Imagine if you could not send an email from a Gmail address to a Yahoo address.”
Novi, consistent with May 2020 blog post, was inspired by the Latin words “novus” for “new” & “via” for “way.” It was created, so that “sending money will be as easy as sending a message,” the post said, through a standalone app like WhatsApp & Instagram.
Facebook is working on it since 2019, when it was firstly named Calibra, likely-to-highlight Facebook’s own digital currency libra.
But stable-coins have been recently placed under heightened scrutiny, certainly tether, for “misleading claims” on having enough US dollar reserves back its every token.