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- According to Facebook CEO David Marcus, the Novi wallet is ready to debut on the Diem blockchain-based payment system
- Novi, according to Marcus, might assist in resolving issues with the world’s expensive and slow payment systems
- Marcus believes that change has been long overdue. Novi is prepared to enter the market
According to David Marcus, the executive who pushed Facebook’s entrance into digital currencies, the company is preparing to launch its digital wallet. Marcus claimed in a message on Wednesday that Novi, a digital currency wallet that will be integrated into Facebook apps, was ready to launch and that it had obtained licenses or regulatory clearances in nearly every state in the US.
Facebook will be added as a rivalry in the payment business
He described Facebook as a rival in the payments business, saying that the wallet would allow free domestic and international person-to-person payments. He also stated that once Facebook had a significant client base, it would be able to give businesses lower merchant payments through Novi while still making a profit on merchant services.
We may then branch out and offer a number of other financial services in collaboration with well-regarded and well-regulated partners, and grow from there, he continued. Following claims that it is looking to partner with a stablecoin other than Diem, a struggling digital currency effort spearheaded by the social media group, Facebook declined to provide more specifics on the exact timing of a launch, as well as which coin or coins the wallet may contain.
Marcus is one of the co-creators of Diem, a project unveiled in 2019 that aimed to build a synthetic cryptocurrency backed by a basket of currencies. Marcus is presently the head of Facebook’s financial services business F2. Facebook, which created Novi to house Diem currencies, is one of 26 firms and non-profits that have backed the project.
Diem substantially scaled back its aim after regulators expressed concerns that such a coin could jeopardize monetary stability and encourage money laundering. Instead, Diem will produce a single stablecoin backed one-to-one by the dollar. However, as the total value in circulation more than doubled this year to $120 billion, stablecoins are now being scrutinized by regulators.
Novi is planning to look for stablecoin partnerships
Top US officials, including Treasury Secretary Janet Yellen, stated in July that recommendations would be issued in the coming months, raising possible threats to consumers, the financial system, and national security. According to a report published earlier this week by The Block, Diem has struggled to gain traction due to regulatory challenges, pushing Novi to look into other stablecoin partnerships. Novi has held talks with stablecoin suppliers Circle and Paxos to this end, according to The Block.
Marcus stated in his memo that because more controls can be implemented into stablecoins and their wallets, they may be able to detect criminal activity more effectively than the traditional banking system. He also addressed concerns about the reserves that back such coins, arguing that an ideal stablecoin that always holds 1:1 reserves in cash at US banks and very short-term Treasuries, with the issuer holding capital as a buffer, with the issuer holding capital as a buffer could provide better consumer protections than a fiat balance held in any wallet available in the US right now.
Tether, the most popular stablecoin, which has more than $64 billion in coins in circulation, has failed to reveal the identity of the issuers of its $30 billion in commercial paper, a type of short-term debt. Stuart Hoegner, the general counsel, stated in a televised interview last month that the firm’s holdings included overseas paper.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
