Facebook Turns to Coinbase, Paxos for Novi Crypto Wallet

By Tim Hakki

Today, Coinbase announced that it will provide crypto custody services for the pilot program of Novi, Facebook’s new digital wallet subsidiary. 

The pilot already went live in the U.S. and Guatemala. You can find it on the Google Play and Apple App stores. While there’s no mention of Diem—Facebook’s long-anticipated cryptocurrency—pilot users will be able to start trading Paxos Dollar (USDP) through their Novi accounts. 

Paxos also wrote a blog post about today’s pilot, saying: “This news represents a tide shift in digital assets, as it’s the first time that stablecoins are readily available in a consumer wallet outside of the crypto ecosystem.” 

All Paxos Dollars purchased on Novi are held on deposit through Coinbase Custody. Users can then send money around the world—ostensibly instantly, securely, and with no fees. 

What’s happening with Diem?

In 2019 Facebook first announced it would be branching into crypto services with a digital wallet and a stablecoin called “Libra.” Today’s launch has brought us the wallet, albeit in embryonic form. What about that stablecoin?

Two years ago, Libra was promoted as a “borderless global currency” backed by “The Libra Reserve,” which a spokesman at the time defining it as a “collection of low-volatility assets like bank deposits and government securities, in currencies from stable and reputable central banks.”

Since then, the Libra Association has lost eight of its founding members, including financial titans PayPal, MasterCard, and eBay. The currency also underwent a name change to Diem—it will now be pegged to the U.S. dollar, like Tether or USD Coin— and, more than two years on, there is no launch in sight. 

Despite Diem’s absence in today’s pilot rollout, a Facebook press release confirmed that the project is still oncoming, stating: “Our support for Diem has not changed... We intend to migrate Novi to the Diem payment network once it receives regulatory approval.”

At this point, one question looms large: Is anyone still interested in a Facebook-backed stablecoin?

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