Facebook Novi pilot chooses Coinbase as custody partner
Facebook has chosen Coinbase as its custody partner for the launch of a pilot of the wallet Novi, which is a digital wallet that people can use to send and receive cryptos and funds safely and securely at a low cost.
Coinbase said that it would be supporting Novi using Coinbase Custody, to ensure that the funds of the users are kept safe and their private keys are managed securely. The announcement also said that the users of Novi would be able to acquire Pax Dollar (USDP) during the pilot which they can hold in their wallets and then they would be able to send and receive the USDP between the various users who also have Novi wallets. The Novi project from Facebook has been ongoing for a long time and it was initially tied with its idea of its cryptocurrency called Libra but it now seems as though the company wants to release the wallet first and hold on to the idea of crypto, for now, to ensure that it doesn’t get into trouble with the regulators.
It was only recently reported that two top engineers had left the project and with others also leaving earlier, Facebook was expected to have some trouble in releasing the wallet. But that seems to have been overcome for now and it would be left to the regulators to decide on how they want to approach this crypto wallet and whether they would allow Facebook to fly with its crypto venture or try and clip its wings to ensure that it doesn’t grow beyond borders and a law unto itself.
Coinbase said that Novi users’ funds will be held within Coinbase Custody Trust Company which is a qualified custodian and a New York limited purpose trust company. Coinbase Custody Trust Company is regulated by the New York Department of Financial Services and is a fiduciary under New York state banking law. Novi users would also benefit from Coinbase Custody’s leading insurance program, which includes a $320 million commercial crime policy. But with NY also seemingly cracking down on certain crypto businesses, it remains to be seen whether this would also turn out to be a challenge for Coinbase and Facebook in the long run.