Meta (ex-Facebook) is testing sending and receiving funds on WhatsApp via the Novi wallet. However, the company has to use a stablecoin other than its Diem (ex-Libra) for the time being, which is still awaiting approval from regulators.
Novi wallet and WhatsApp: crypto transactions as easy as sending a message
On December 9, 2021, Stephane Kasriel, head of product at Novi, announced in a tweet that a “limited number of people in the US” will be able to send and receive “money using Novi on @WhatsApp.” Novi is the cryptocurrency and fintech arm of Meta. Will Cathcart at the head of WhatsApp, confirmed the information, while stating that the transactions will be secure, instant, and free of charge.
Meta has officially launched the pilot version of its Novi wallet, with Coinbase and Paxos in October 2021. This pilot was deployed in the United States and Guatemala. The select group of users who were able to download the wallet on iPhone or Android, can make transactions in pax dollar (USDP) which is the stablecoin issued by Paxos.
Meta was able to, according to Kasriel, test and determine the features and functionality “most important to people” through this trial version of the Novi wallet. Using Novi will have no impact on the privacy of WhatsApp messages and calls, “which are always encrypted end-to-end.”
Novi and Diem wallets: still facing regulatory hurdles for Meta’s stablecoin
A Meta spokesperson had reaffirmed the company’s intention to use Novi for its Diem stablecoin as soon as it receives the green light from regulators:
“We intend to launch Novi with Diem as soon as it receives regulatory approval and is operational.”
Diem’s launch is facing fears from institutions, but also from non-state organizations, which may not see Meta’s dive into cryptocurrencies as a good thing. The Open Markets Institute, which is a U.S. nonprofit organization, sent a letter to various regulators, including the U.S. Department of Justice, after the Novi wallet pilot was launched.
In the letter, they point out that Meta may be engaging in illegal activity by offering depository services without having a bank charter. The organization even criticizes the use of USDP in the Novi wallet, mentioning the links between Paxos and Binance, knowing that the latter is far from being the model exchange for regulators in different countries.
Novi is moving forward and taking a big step forward via this test of the integration of its wallet on WhatsApp, and this despite the hostility of the regulators towards Diem, to which is added the planned departure of the leader of the crypto branch of Meta.
