Meta Drops The Axe On Its Digital Wallet Novi

The remnants of Meta’s once-ambitious cryptocurrency project are fading away.

According to a notification on its website, a pilot program for Novi, the social networking giant’s money-transfer service using its own cryptocurrency digital wallet, will suspend operations on September 1.

The company said Friday that on July 21, users will no longer be able to add funds to their Novi accounts.

The firm has instructed users to remove their Novi holdings prior to Sept. 1. After that date, any remaining cash will be transferred to the listed bank accounts or debit cards on their Novi accounts.

The Novi pilot began serving Guatemala and portions of the United States in October of last year. The company plans to leverage Novi’s technology in future initiatives, such as its metaverse, according to an email from a company representative.

Suggested Reading | Bitcoin Legalization Pushed By Mexican Senator, Despite Central Bank’s Opposition

Meta Knew Novi Won’t Last Long

The planned scrapping of Novi is not unexpected. The company and its partners terminated Diem early this year, a similar cryptocurrency venture that was started in 2019 under the name Libra, while Meta was still known as Facebook.

Another setback to the ambitions was the announcement in 2021 by David Marcus, one of the leaders leading Meta’s drive into cryptocurrencies, that he would depart the business to pursue entrepreneurial endeavors.

Image: Pymnts.com

Novi was initially designed to facilitate rapid and frictionless payments with the Diem cryptocurrency supported by the company, but legal hurdles compelled the firm to collaborate with Coinbase and use the Paxos stablecoin (USDP) instead.

Meta announced in a statement:

“You can expect to see more from us in the web3 space because we’re very positive about the value these technologies can provide people and businesses in the metaverse.”

Members of the United States Senate demanded that Meta shuttered its Novi project shortly after its debut in October last year, arguing that the company “cannot be relied upon to manage bitcoin.”

The unraveling of Meta’s Novi ambitions is taking shape in the midst of a widening crypto market collapse and massive selloff issues at big companies such as cryptocurrency hedge fund Three Arrows Capital and Celsius Network.

BTC total market cap at $363 billion on the daily chart | Source: TradingView.com

Suggested Reading | El Salvador, Unfazed By The Bear Market, Buys 80 Bitcoin – Will Others Do The Same?

As reported by CNBC and Bloomberg, Three Arrows filed for Chapter 15 bankruptcy to protect its US assets from creditors in the nation.

Celsius froze withdrawals and transfers earlier this month, citing “extreme” market conditions, preventing its 1.7 million customers from redeeming their holdings.

Meanwhile, the company has been expanding its metaverse operations. Mark Zuckerberg, CEO of Facebook, disclosed this week that his company intends to recruit billions of users to the digital universe, thereby creating enormous money for Meta.

Featured image from Home Stratosphere, chart from TradingView.com