Three years after Facebook announced its ill-fated push into cryptocurrency, aka the Libra project, the tech giant has signalled another scaling back of its activity — announcing Friday that Novi, the digital wallet payments pilot it launched last October, will be ending on on September 1.
In a statement provided to CoinDesk, the tech giant that’s now known as Meta suggested it has plans to repurpose the digital wallet technology (neé Calibra) for future products, including those related to its eponymous focus on “metaverse” development. Although it’s not clear exactly what Meta might have in mind for repurposing the Novi tech.
Senior Meta execs have talked up the metaverse as a major opportunity for digital commerce. Albeit, they’ve also cautioned over the lengthy timescales that will be required to develop the sought for market — suggesting it could take decades.
In recent months, the company has also been testing support for digital collectables (aka NFTs) — so Meta having its own digital wallet infrastructure could support a wider push into non-fungible token trading if it decides there’s enough money to be made on that front (but, again, NFT trading volumes are steeply down vs last year — as digital collectables catch crypto’s chill).
The Novi pilot, meanwhile, was a lot more basic: It enabled testers to make fee-free, instant personal payments via the Novi app, using a stablecoin as the transfer medium — with Meta’s marketing claiming its tech made sending money “as easy as sending a message”. The pilot was limited to users in the US and Guatemala.
A limited integration with WhatsApp was also rolled out last December for a subset of US users of the Facebook-owned messaging platform.
However the wallet project was generally hampered by Meta’s crypto ambitions never having panned out as hoped — in the face of regulatory push-back and withering support.
Following years of governance scandals, it’s fair to say that Facebook’s reputational troubles impeded its ability to ‘move fast and break things’, as crypto raised the stakes for regulatory concerns, around issues like money laundering and currency volatility.
Hence, at launch, Novi was already scaled back vs the original ambition — involving another stablecoin, USDP, rather than the coin associated with the Libra project itself (Diem), for example.
More recently, writing on the wall for the digital wallet included the departure of Meta’s top crypto exec: David Marcus, who had headed up Novi, and who announced his departure in November.
Then, in January, the Libra/Diem Association, aka the consortium Meta had originally set up to back and steer the crypto project, announced it was winding down — selling off the assets of the Diem stablecoin. Aka: Game over.
A note on Novi’s website informing users of the looming end of the payment pilot offers no color or context on Meta’s decision to pull the plug — with the tech giant merely writing:
“Novi will no longer be available for use after September 1. Before Novi goes away, we’ve made it easy for you to get your remaining balance and download your Novi information.”
There is, for example, no mention of the wider crypto market free fall that’s led to dramatic sell offs in recent months and ramped up scrutiny of stablecoins over concerns about stability. Nor any reference to rising attention internationally on crypto regulation. But changing market conditions are surely further cooling Meta’s interest.