Using Meta’s Novi digital wallet, WhatsApp is testing a cryptocurrency payment system.
As a result of failing to get Libra approved as a global digital currency, this feature is only available for WhatsApp users in Guatemala and the US.
But the long-term aim for Meta is the same. In its words: solving the challenges faced by 1.7 billion adults globally who are unable to engage with global financial systems.
In a statement announcing the WhatsApp partnership, Novi said: “Being shut out of the global financial system has real consequences for people’s lives, and it’s often the most underserved people who pay the highest price.
“Costs are high and waits are long when people want to send money to their families internationally. The current system is failing them, and there is no digital financial architecture to support the innovation we need.”
What tokens can be traded?
The trial participants will be able to send and receive the US Pax Dollar (USDP) token, a cryptocurrency whose value is pegged to the US dollar and is regulated by the New York State department of financial services.
Meta said it valued the so-called “stablecoin” precisely because it didn’t exhibit the kind of volatility that recently saw Bitcoin lose over a fifth of its value.
Currently, Meta does not offer other tokens, such as Ether, Bitcoin, or its own cryptocurrency, Diem, which replaced their plans for Libra.
Meta said its support for Diem hasn’t changed, although its plans to introduce a global cryptocurrency have been delayed.
Diem will begin using the USDP instead of Diem once it receives regulatory approval.
USDP was chosen because it has “been operating successfully for over three years and… has important regulatory and consumer protection attributes”, the Novi statement explained.
“USDP reserves are fully backed by the US dollar and are held 100% in cash and cash equivalents,” the statement added, meaning “people can easily withdraw their money in their local currency when they choose”.
“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,” said Novi’s chief executive Stephane Kasriel.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
