Facebook has unveiled a pilot scheme in the US and Guatemala for remittances on its digital wallet project Novi using the USDP (Pax Dollar) stablecoin.
David Marcus, the head of Facebook’s financial arm F2, unveiled the scheme today in a thread that outlined key details regarding the future of the project and the opportunities that Facebook has to “change the game” for people “left behind by the current financial system”.
In the thread, Marcus said that remittances on the Novi wallet would allow users in the US and Guatemala to “send and receive money instantly, securely, and with no fees” and noted the importance of the ‘remittance corridor’ between the two countries.
Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the @Novi digital wallet app in two countries — the US and Guatemala. People can send and receive money instantly, securely, and with no fees. 1/8
— David Marcus (@davidmarcus) October 19, 2021
The Novi pilot scheme will use USDP (Pax Dollar) through partnerships with Paxos and Coinbase, which confirmed it will provide custodial services for Novi via Coinbase Custody.
According to Coinbase, Novi users who participate in the pilot can acquire Pax (USDP) through their Novi account – which will be held on Coinbase Custody – and be able to transfer USDP for free.
According to Marcus, USDP has “important regulatory and consumer protection attributes”, which may be the reason why the coin was chosen over other stablecoins such as Tether (USDT) and USD Coin (USDC).
In regards to Facebook’s support for the long-awaited Diem, Marcus reaffirmed that its “support for Diem hasn’t changed” and that Facebook intends to launch Novi with full Diem functionality “once it receives regulatory approval and goes live”.
Formerly known as Libra, Diem is the Facebook-backed stable coin that has so far failed to materialise due to strong opposition from regulators. The project now exists under the ‘Diem Association’ – a team dedicated to “building a blockchain-based payment system that supports financial innovation”.
Marcus also expanded on the ‘business model’ behind the wallet, saying that payments will be free using Novi. He noted that once a “solid” customer base has been established, Novi will begin to offer cheaper payments for merchants.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.