Facebook Chooses Coinbase As Custody Partner for New Digital Wallet Rollout

Social media giant Facebook is launching the Novi crypto wallet today in the United States and Guatemala.

The initial rollout only allows users to trade the Paxos Dollar (USDP) stablecoin, which is secured by Coinbase.

An announcement on the Coinbase Blog says,

“Novi users’ funds will be held within Coinbase Custody Trust Company, a qualified custodian and a New York limited purpose trust company. 

Novi users also benefit from Coinbase Custody’s leading insurance program, which includes a $320 million commercial crime policy.”

Coinbase Custody claims to securely manage over $180 billion worth of crypto assets as of June 2021.

According to David Marcus, the head of Facebook Financial (F2), Novi’s “small-pilot” rollout will test network capabilities while demonstrating a real-world use case for USDP.

“We’re doing a pilot to test core feature functions, and our operational capabilities in customer care and compliance. 

We’re also hopeful this will demonstrate a new stablecoin use case (as a payments instrument) beyond how they are typically used today.”

The Novi platform’s planned cryptocurrency Diem (formerly Libra) is still facing regulatory approval and will not be available in Novi wallets until approved.

Marcus concluded a Twitter thread discussing the announcement by saying the company aims to disrupt the payments landscape.

“Beyond the pilot, our business model is clear. We’re a challenger in payments. We’ll offer free person-to-person payments using Novi. Once we have a solid customer base, we’ll offer cheaper merchant payments and make a profit on merchant services.

Scaling Novi will take time and this pilot is a great chance for us to learn from our early customers. We want to make sure that our wallet has been fully tested before we open Novi up to more people.”

Featured Image: Pixabay: blueberrykings111