Facebook's Novi digital wallet is now available in most U.S. states and Guatemala in a pilot test of the product, the company said Tuesday. Users can access the platform as a mobile app available on both Apple's App Store and Google Play.
Novi is a rebrand of the Calibra wallet Facebook first announced last year, as part of a larger overhaul and rebranding of Facebook's nascent crypto projects amid intense scrutiny from regulators worldwide. While Facebook is still working on the Diem cryptocurrency (formerly known as Libra) in partnership with members of the Diem Association, it's pushing out Novi now to gather data and test the efficacy of the platform.
"The purpose of the pilot is for us to affirm our operational readiness and show that our Novi systems, such as our customer care response, compliance program, and core features features, are serving customers well," Novi chief David Marcus, the former PayPal executive who for years ran Facebook Messenger before heading up the social network's blockchain division, said in a press release.
More broadly, Facebook is trying to get a foothold in the financial services sector — especially in the developing world — and it sees cryptocurrencies and digital wallets as its best avenue to do so. "Globally, about 1.7 billion adults don't have access to a bank account but could have access to safe and affordable financial service through mobile phones if the right system existed," Marcus said.
For now, Facebook says it is allowing people to send and receive money using the USDP stablecoin operated by blockchain company Paxos and in partnership with Coinbase. In other words, its function right now is to act as an easy way to transfer and hold money, especially in the absence of traditional banking.
Users of Novi can transfer funds into Novi, convert them to USDP (with $1 equaling 1 USDP) and then withdraw any money received in their local currency. Facebook says because USDP is a stablecoin fully backed by the U.S. dollar with cash reserves, it has the necessary regulatory oversight and consumer protections in place to prevent fraud and other potential pitfalls.
Marcus said this does not mean Facebook is distancing itself from the Diem project. "Our support for Diem has not changed," he said. "We see great value in the way Diem is designed with robust protections for consumers and controls to combat financial crime. We intend to migrate Novi to the Diem payment network once it receives regulatory approval." Marcus goes on to write that the goal with Novi is not to have it be used exclusively with Diem, but to be interoperable with other digital wallets.
There are some exceptions to availability for now. The mobile app won't be available to residents of Alaska, Nevada, New York or the U.S. Virgin Islands for now. Signup will require a valid government ID and sending and receiving funds will require both parties have active Novi accounts. Picking up funds can be done in person at a physical location depending on where you live or to a valid bank account.
Correction: A previous version of this article implied Facebook oversees the Diem cryptocurrency project. Like its predecessor Libra, Diem is being developed by a member-based association of multiple stakeholders, of which Facebook is just one.