Mark Zuckerberg, Facebook says goodbye to their crypto
There has been no official announcement.
And even if there was one, this announcement would have gone unnoticed: Mark and Zuckerberg and his company, Meta Platforms (META) – Get Meta Platforms Inc. reportno longer have a digital payment project.
Zuckerberg has chosen his moment well: The crypto sector is currently going through a unique crisis of confidence characterized by a fall in the price of digital currencies. Bitcoin, the king of cryptocurrencies, has lost 71.3% of its value since its all-time high on November 10, according to data from CoinGecko. Ether, the second cryptocurrency measured in market value, is also down 78% from its record high in November. In total, the crypto market has lost over $ 2.1 trillion in eight months.
In addition to falling cryptocurrency prices, attention is focused on the liquidity crisis that is currently affecting many prominent crypto firms. In fact, the collapse of sister token Luna and UST in May caused the bankruptcy of the hedge fund Three Arrows, which had borrowed large sums of money from a number of crypto borrowers such as Voyager Digital (VYGVF) – Get Voyager Digital Ltd report, Babel Finance and BlockFi to invest in Luna. In the face of payment defaults from Three Arrows Capital or 3AC, these companies are currently in great financial difficulties, and some have had to suspend withdrawals. Their customers basically no longer have access to their money.
Novi will close on 1 September
It is therefore in this context that Zuckerberg and Meta, the parent company of Facebook, Instagram and WhatsApp, are leaving Novi, their service that would allow people to send money to each other using a cryptocurrency.
The announcement was made on the website dedicated to Novi.
“The Novi pilot will end soon,” the company wrote. “Novi will no longer be available for use after September 1.”
“Before Novi disappears, we’ve made it easy for you to get your remaining balance and download your Novi information.”
The social media giant then explains to users how to withdraw their money before the rug finally falls for Novi.
“It is important that you withdraw any remaining balance in your Novi account before that date. You can choose to transfer the Novi balance to your bank account or withdraw it as cash where applicable.”
Scroll to Continue
It warned that: “After September 1, 2022, you will no longer be able to log in to your Novi account and you will lose access to that information.”
Facebook had launched Novi in October last year using the cryptocurrency exchange platform Coinbase (COIN) – Get Coinbase Global Inc Report in beta form, a kind of test that would then be expanded. Coinbase brought a kind of digital storage and technology to secure user funds.
“Facebook has chosen Coinbase as its depository partner for its pilot of Novi, a new digital wallet that enables people to send and receive money abroad instantly, securely and without fees,” Coinbase said in a blog post in October last year.
Here’s how it worked: Novi had the ambition to let users send money to each other, through an app or via Facebook Messenger and WhatsApp, using Pax Dollar (USDP), a stable currency whose value is linked to the dollar. Basically, one USDP equals one dollar. There is no volatility.
“Novi users who can participate in the pilot can obtain Pax Dollar (USDP) through their Novi account, which Novi will hold on deposit with Coinbase Custody. Novi users will then be able to transfer USDP between each other immediately,” the company explained at. the time.
Facebook originally planned to issue and accept Diem / Libra, a stable currency the company intended to make with a group of financial institutions, but Diem / Libra met opposition from regulators who feared it would disrupt the financial system. Regulators also feared that Diem / Libra would become a means of money laundering and a competitor to fiat currencies such as the dollar. The call caused Facebook to leave Diem / Libra in January.
“Despite giving us positive feedback on the design of the network, it became clear from our dialogue with federal regulators that the project could not go ahead,” Diem CEO Stuart Levey wrote in a statement on January 31. “As a result, the best way forward was to sell the Diem Group’s assets, as we have done today to Silvergate.” (SAY) – Get Silvergate Capital Corporation Class A Reporta crypto-focused company.
The departure of Novi appears to bury Meta’s ambitions in cryptocurrencies, but the company is still working on a potential virtual currency that will be used in the meta-version, according to the Financial Times. Metaverset is a virtual world where we are asked to interact with our avatars and through objects. technologies such as virtual reality headsets.
“We have notified Novi Pilot participants that we are terminating the pilot program at this time,” a Meta spokesman told TheStreet in an email. “We will continue the technology we developed and what we have learned from the program for future products across the company while focusing on building for the metaverse.”
“We are already taking advantage of the years spent building capacity for Meta in general on blockchain and introducing new products, such as digital collectibles. You can expect to see more from us in the web3 site because we are very optimistic about the value these technologies can provide. to people and businesses in the metaverse. ”
