Three years after Facebook announced its ill-fated push into cryptocurrency, aka Project Libra, the tech giant has reported yet another reduction in its business – announcing Friday that Novi, the digital wallet payment pilot it launched last October, will end on September 1st.
In a statement provided to CoinDesk, the tech giant now known as Meta suggested that it plans to reuse digital wallet technology (née Calibra) for future products, including those related to its eponymous focus on the development of the “metaverse”. Although it’s unclear exactly what Meta might have in mind to repurpose Novi technology.
Senior Meta executives have touted the Metaverse as a major opportunity for digital commerce. Although they also warned of the long lead times it will take to develop the desired market, suggesting it could take decades.
Over the past few months, the company has also been testing support for digital collectibles (aka NFTs) – so Meta having its own digital wallet infrastructure could support a broader push into non-fungible token trading if it decides. that there’s enough money to be made on that front (but, again, NFT transaction volumes are down sharply from a year ago – as digital collectibles catch the chill of the crypto).
The pilot Noviduring this time, was much more basic: it allowed testers to manufacture instant, free personal payments through the Novi app, using a stablecoin as a transfer medium – with Meta marketing claiming its technology makes sending money “as easy as sending a message”. The pilot was limited to users in the United States and Guatemala.
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 which never pan out as hoped – in the face of regulatory pushback and dwindling support.
After years of governance scandals, it’s fair to say that Facebook’s reputational issues have hampered its ability to “move fast and break things” as crypto has raised the stakes for regulatory issues, around issues such as money laundering and currency volatility.
Therefore, at launch, Novi was already scaled down from the initial ambition – involving another stablecoin, USDP, rather than the coin associated with the Libra project itself (Diem), for example.
More recently, the writing on the wall for the digital wallet has included the departure of Meta’s top crypto chief: David Marcus, who had run Novi, and who announced his departure in November.
Then, in January, the Libra/Diem partnership, aka the consortium that Meta had originally set up to support and lead the crypto project, announced that it was ending – by selling the assets of the Diem stablecoin. Aka: Game over.
A note on Novi’s website notifying users of the impending end of the payment pilot offers no color or context for Meta’s decision to pull the plug – with the tech giant simply writing:
“Novi will no longer be available after September 1. Before Novi went away, we made it easy for you to get your remaining balance and download your Novi information.”
There is, for example, no mention of the broader crypto market freefall that has led to dramatic selloffs in recent months and heightened scrutiny of stablecoins due to stability concerns. Nor any reference to the growing international focus on crypto regulation. But changing market conditions are surely cooling Meta further interest.
Meta has been contacted for comment.