Facebook Novi Wallet now piggybacks on Paxos
Facebook Novi wallet, the long in development crypto and stablecoin wallet, has started taking its baby steps as it has now been pushed to some Whatsapp users in the USA who can now make payments using it.
This comes after a 6 week trial in the US and Guatemala and the users who now have the authority to make transactions would be able to send the stablecoin called Paxos dollar (USDP) to others in an instant and highly secure manner.
Paxos Instead of Diem?
What has made many of the crypto experts sit up and take notice is the fact that Facebook, now called Meta, has chosen to push this new payments system using USDP instead of using its in-house crypto called Diem. This Diem project has been under the watchful eyes of several regulators and hence this sudden switch to USDP would have caught them by surprise. It also brings into question what Facebook plans to do with the Diem project and whether it would be dropped once and for all.
USDP is the seventh most used stablecoin with less than one billion in circulation as compared to USDT and USDC which have more than $40 billion each in circulation. The fact that Facebook has now allowed crypto payments via WhatsApp should again bring to the attention of the regulators who have long hounded the Diem stablecoin and its predecessor Libra coin as they felt that Facebook would use these stablecoins to build a parallel financial economy where users would be able to use these cryptos to transact within Whatsapp and other platforms that Facebook is likely to build, including a metaverse and thus ensure that these funds and transactions are out of the reach of regulators.
Parallel Financial Ecosystem
So far, there does not seem to be any measures in place to stop this move and the reach of Facebook, which extends to all parts of the globe is likely to be a scary thought for the regulators as it could then disrupt the traditional financial ecosystem as we know it and put a lot of financial clout into the hands of Facebook (Meta). This could in turn prompt the regulators to come down hard on the crypto industry as a whole and that would prove to be unhealthy for the industry.