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Facebook Calibra Digital Wallet Gets a New Name – Novi

What is Novi?

Facebook has renamed its digital wallet, Calibra, as Novi. Calibra was the digital wallet that the social media giant has been building to access Libra digital currencies.

In a blog post, the company explained that the new name was inspired by the Latin words “novus” and “via,” meaning “new” and “way.” The digital wallet company, a subsidiary under Facebook will now be named Novi Financial.

As previously reported by Blockchain.News, Libra has abandoned its original plan of a widely accessible permissionless digital currency aimed to solve financial inclusion issues, due to ongoing regulatory backlash.

Libra was seen as a controversial project, especially in the eyes of regulators. Libra has then applied for a payment system license from the Swiss Financial Markets Supervisory Authority (FINMA), to be able to allow the Libra payments system to be used publicly.

One of the major updates of the Libra whitepaper is that it explicitly mentions the limits of what users are able to do on the network, including balance and transaction limits, and the network would only be accessible to regulated crypto firms in the beginning.

As stated on Novi’s website, the project is now moving towards providing individual stablecoins for major fiat currencies, including USD, EUR, and GBP. Previously, the Libra stablecoin aimed to be backed by a basket of global currencies, which also included the Singapore Dollar, and Japanese Yen.

Despite changing the name of the digital wallet, Facebook says the mission for both Novi and Libra remains unchanged – enabling the transfer of money as easy as “sending a message.”

A standalone Novi app is a part of the plan, as well as a version where it is integrated with WhatsApp and Facebook Messenger to allow consumers to send money to their contacts easily.

David Marcus, the Co-creator of what was once known as Calibra, now Head of Novi also explicitly mentioned in his tweets, that instead of creating a global, digital currency payment network, the focus has shifted to act as a wallet for stablecoins. Although Libra hopes to work with as many central banks as possible, for jurisdictions whose currency has not been added to Libra’s stablecoin backing will be unable to use it.

Binance’s take on Libra

Binance took a closer look at Libra’s recent whitepaper update and concluded that Facebook’s project could potentially disrupt the payment industry.

There is an advantage of issuing widely-available programmable currency, which could lead to efficiency gains. As an optimistic comparison, Binance added, “Libra’s envisioned global payment system could do to the payment industry what SpaceX did to the space industry: shake the foundations of a well-established sector with high entry barriers.

Technology entrepreneur Elon Musk, the founder of SpaceX, was mentioned in the report as an industry leader in the space sector due to its significant step forward in improving speed for rocket journeys.

The report also highlighted that most payment systems are operated by a central bank and of regional scope, as Libra could have an advantage has it could potentially have a wider reach of users. Focusing further on financial inclusion, Binance claims that Libra positions itself as a new financial framework to “enable a simple global currency and financial infrastructure that empowers billions of people.”

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Libra Appoints New Chief Compliance Officer, Third C-Suite Executive Appointed with a Strong Compliance Track Record

The Libra Association appointed Sterling Daines as its new Chief Compliance Officer (CCO), who is currently the Managing Director and Global Head of Financial Crime Compliance at Credit Suisse.

He is expected to leave his position at Credit Suisse and join the Libra Association later this year. Prior to Credit Suisse, he was the Managing Director and Deputy Head of Financial Crime Compliance at Goldman Sachs and has worked as a consultant to the US Department of Justice and the Financial Crimes Enforcement Network (FinCEN).

“I am pleased to join the Libra Association as it works to transform the digital payment space to empower billions of people,” said Daines in a press release shared with Blockchain.News. “A critical element of achieving this mission is to ensure we are building a safe, compliant, and reliable platform for all users, which I look forward to significantly contributing to.”

Libra gets appointed first CEO, Stuart Levey

The Libra Association appointed its first CEO, Stuart Levey, the Chief Legal Officer at HSBC Holdings. Levey will be overseeing the Libra digital currency and payments system and holds a strong compliance track record and is expected to join Libra in the coming months. However, HSBC has not shown the same upright compliance record.

Levey is also expected to “combine technology innovation with robust compliance and regulatory framework.” The Facebook-led project has invited scrutiny from global regulators, with concerns over its threat to national sovereignty with its potential launch. Many of Libra’s original members, including Vodafone, PayPal, and Visa have also chosen to leave the association.

Three C-suite level executives have worked or consulted in the Department of Justice, coincidence?

Robert Werner, the General Counsel at the Libra Association was also appointed a month earlier. Regarding the addition of Sterling Daines to the team, he said, “I am thrilled that Mr.Daines will be joining the Libra Association as our Chief Compliance Officer. Mr. Daines is a world-class compliance leader and will bring critical expertise to the project.”

Werner has previously worked in the Justice Department’s Office as the Legal Counsel where he advised the Attorney General and White House Counsel.

Prior to joining HSBC, Libra’s appointed CEO Stuart Levey has served as the Principal Associate Deputy Attorney General at the US Department of Justice and has served as the Associate Deputy Attorney General.

Although Sterling Daines has not worked directly at the US Department of Justice, he has served as a consultant to institutions including the Justice Department and FinCEN.

Facebook Taps Coinbase to Offer Custody Services for Novi Digital Wallet Rollout

On Tuesday, October 19, Facebook Inc announced that it has launched its new digital wallet for crypto assets called Novi and has hired Coinbase cryptocurrency exchange to be its custody partner.

According to the statement, Facebook is currently rolling out Novi digital wallet based on a small pilot program in The U.S. and Guatemala to allow users to trade the Paxos Dollar (USDP) stablecoin. The company said that the full rollout will enable people to send and receive money abroad instantly, securely, and with no fees.

Coinbase is assisting Novi through Coinbase Custody, which keeps funds secure with its software that manages cryptocurrency transactions.

In other words, Novi users can buy Paxos dollar (USDP) stablecoin through Novi, and Novi will deposit the funds with Coinbase.

According to its market capitalisation, Paxos dollar (USDP) is a stablecoin whose value is pegged to the U.S. dollar and currently ranks position 100.

As per the announcement, Facebook stated that it selected USDP to conduct their test for their systems with the stablecoin, which has been operating successfully for more than three years. The social media giant also mentioned that it chose USDP because stablecoin has important consumer protection and regulatory attributes.

David Marcus, the head of Novi, talked about the development and said that they chose USDP because its services are fully backed by U.S. dollars and are held 100% in cash equivalents and cash. “This means that people can easily withdraw their money in their local currency when they choose,” he explained.

Facebook stated that it eventually plans to migrate Novi to a cryptocurrency it backs called Diem once it obtains regulatory approval. Facebook mentioned that the goal of Novi has always been enabling interoperability with other digital wallets. Marcus said:

“The goal of Novi has been and always will be to be interoperable. Imagine if you couldn’t send an email from a Gmail address to a Yahoo address,”

Diem Facing Regulatory Concerns

Since its inception, the Facebook-affiliated Diem cryptocurrency has changed nearly everything about itself – timeline, partners, structure, and name. It even changed its headquarters from Switzerland to the U.S., one of the most important moves.

Due to its relationship with the data-hungry Facebook, Diem (formerly Libra) has encountered pressures from regulators across the globe. Some of the major concerns by regulators involved fears that Diem could threaten monetary stability and potentially enable money laundering. Facebook’s involvement also implied that regulators are concerned over how it could protect users’ privacy.

To move ahead, the project relocated its headquarters to the U.S. and chose Silvergate bank, a crypto-friendly bank based in California, to issue the stablecoin.

Despite losing some members such as PayPal, eBay, Vodafone and others, Diem picked up other experienced partners that could assist in smoothening its path to other countries.

Meanwhile, a group of five Senate Democrats yesterday wrote an official letter to Facebook CEO Mark Zuckerberg urging him to discontinue the Novi wallet pilot. Led by Senator Elizabeth Warren, the policymakers argued that Facebook had not provided a satisfactory explanation of how Diem would prevent illicit financial flows and other criminal activity.

WhatsApp to Test Crypto Payments in U.S. by Using Novi Digital Wallet

WhatsApp, a popular mobile messaging app owned by Meta Platforms (formerly Facebook), is testing cryptocurrency payments for a limited select group of users in the U.S. via its Novi digital wallet.

The WhatsApp crypto payments feature will allow users to send and receive money instantly, securely, and with no fees and use the Paxos stablecoin, which Novi wallet relies on.

The CEO of WhatsApp messaging service, Will Cathcart, talked about the announcement via Twitter and said “New in the U.S.: use your Novi digital wallet to send and receive money right within a WhatsApp chat. People use W.A. to coordinate sending money to loved ones, and now Novi will help them do that securely, instantly, and with no fees.”

Meanwhile, the incoming leader of Novi, Stepehen Kasriel, also announced on Twitter and stated that the new feature will allow users to send money to friends and family easily: “We often hear that people use WhatsApp to coordinate sending money to loved ones, and Novi enables people to do that securely, instantly and with no fees.” Kasriel further said that payments will appear directly in people’s chats.

Like how WhatsApp payment works in India, the new payment feature is set to enable users to tap on the Plus symbol on iOS or the paper clip icon on Android to choose payments from the menu. Payments made using the Novi wallet are instant and with no fees. However, Novi does not support the use of other crypto coins like Bitcoin or Ether. It only relies on Paxos’ stablecoin, whose value is pegged to the value of the U.S. dollar. The new crypto payments will not impact end-to-end encryption on WhatsApp.

The firm will require users to provide government-issued photo I.D. cards, and in some cases, video selfies. Besides the account security, this will allow WhatsApp’s to ensure transactions meet international anti-money laundering laws.

Together with anti-fraud monitoring and two-factor factor authentication, WhatsApp’s Novi/Paxos transactions will provide something unique in the crypto world: a “full refund for unauthorized transactions.”

The Novi wallet uses Paxos stablecoin Pax Dollar (USDP) – the seventh-largest stablecoin, with a market cap of about $950 million. The two largest stablecoins, tether and USD coin, have a market cap of $76 billion and $42 billion, respectively.

Meta Pushing Ahead with Crypto Plan

The development by WhatsApp embracing cryptocurrency payment comes at a time when Meta Platforms Inc is conducting a small-scale, six-week trial in Guatemala and the U.S. The company has already started testing Novi in Guatemala and the U.S., allowing the stablecoin Pax dollar transfers. During the pilot trial, the firm has been able to test and learn which features and functionalities are most vital to people and now focuses its efforts on making them even better.

As reported by Blockchain.News, Stephen Kasriel is replacing David Marcus, who announced plans to step down as the head of Novi and Meta’s Fintech division on November 30, citing the nudging of his “entrepreneurial DNA.”

Marcus, who spearheaded Facebook’s Novi wallet project, will leave the media firm at the end of the year. He worked at Meta platforms for seven years, serving as the vice president of messaging products from 2014 before co-founding the Diem cryptocurrency and taking over Novi in 2018. The current vice president of Novi product is Stephen Kasriel.

In 2019, Facebook announced plans for its own cryptocurrency known as Libra and told Libra Association. However, central banks and regulators worldwide were concerned about the plan and associated the efforts with the company’s attempts to gain more power.

As a result, Facebook scaled back global rollout plans for Diem following concerns among regulators that the service could gain too much control over the money system, and in turn, could enable crime and harm users’ privacy.

Now Diem focuses on creating a stablecoin pegged to the U.S. dollar to avoid the volatility that makes other cryptocurrencies challenging to use. The Novi wallet replaced the original Libra wallet, and it will support future Diem coins once they begin rolling out. The wallet currently supports Paxos dollars and allows seamless and easy payment with no hidden costs.