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Meta is running a trial to provide U.S. WhatsApp users with the ability to send and receive money using the technology giant’s digital wallet vehicle, Novi.
Meta, which until last month went by the name Facebook, has announced that a limited number of users in the United States will be able to send and receive payments through its cryptocurrency wallet, Novi, from within WhatsApp.
However, when making the transfer, users will not be buying cryptocurrencies. Rather, it is simply money transfers that use a stablecoin as an instrument.
This follows the company’s decision in October to launch a pilot whereby users in the U.S. and Guatemala could send each other personal payments using the wallet.
Although this is an expansion on that first pilot, a spokesperson for the company was unable to confirm to VIXIO how many U.S. WhatsApp users will be eligible to take part in this new phase for Meta’s payments plans.
“Since we introduced the Novi pilot just six weeks ago, we’ve been able to test and learn which features and functionality are most important to people and focus our efforts on making those even better,” said Stephane Kasriel, head of Novi, in a thread on social media platform Twitter.
Users have fed back to the company that they use WhatsApp to coordinate sending money to loved ones, he continued. “Novi enables people to do that securely, instantly and with no fees. Payments will appear directly in people’s chat.”
Kasriel did, however, use caution in his statement.
“We’re still very early in the Novi pilot journey, so we made the decision to test this new entry point in one country to start and will look to extend it once we’ve heard from people what they think of this new experience,” he said.
Meta’s focus on entering the payments industry has shifted since it ruffled regulatory feathers with its Libra white paper in 2019.
Libra itself has, much like Facebook, been subject to a name change. Last year, the association backing the stablecoin project became Diem.
Despite originally planning to use its own digital currency, Diem, for its October WhatsApp trial, the company ultimately decided to pilot the service using Paxos’ USDP stablecoins.
Although the pilot currently uses the Paxos stablecoin, Facebook intends to migrate Novi to the Diem payment network once it has received regulatory approval.
However, name changes have not stopped bite back from politicians and regulators.
Meta’s Novi push has provoked opposition from several Democrat senators in the U.S. This includes Sherrod Brown, who chairs the Senate Banking Committee, and Elizabeth Warren, a champion of consumer financial protection on the party’s progressive wing.
In a letter addressed to Mark Zuckerberg that thinly veiled their distaste with the bigtech’s foray into finance, the senators said that the Silicon Valley giant “cannot be trusted to manage a payment system or digital currency,” while calling for Meta to “immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically but also for stablecoins in general,” they wrote.
Across the Atlantic, EU politicians are hardly enthusiastic either.
Last autumn, France’s finance minister, Bruno Le Maire, complained that the EU’s proposed crypto framework, the Markets in Crypto-Assets (MiCA) Regulation, does not go far enough to address stablecoin risks.
“We don’t want Libra to be allowed to create money in the way that the ECB does," he said.
Le Maire, alongside counterparts from Italy, Spain and the Netherlands, have also previously issued a joint statement to express their concerns about cryptocurrencies and the EU economy. This included a call for the European Central Bank (ECB) to be the only issuer of money.
The ECB has been aligned with its political counterparts too.
In November, it said that there is an urgent need for intervention when it comes to stablecoins, advocating that central banks should take advantage of stablecoins' current low risks, and that it would build up a regulatory framework in the Financial Stability Review.
With regulatory and political pushback against Meta becoming a common theme, whether with its jump into the payments world or further afield through legislation like the Digital Markets Act in the EU and the UK’s Online Harms proposal, it seems likely that name changes will only bide the company time before it faces fresh scrutiny.
