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Meta to shut down its crypto wallet Novi from September

Meta to shut down its crypto wallet Novi from September
Photo Credit: Pixabay
3 Jul, 2022
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Tech major, Meta - formerly known as Facebook - plans to shut down its Novi crypto wallet starting September 1, less than a year, after the company made its debut. The company announced the upcoming closure on Novi’s website, informing customers that “The Novi pilot is ending soon” and will no longer be available for use after that date.

Both the Novi app and Novi on WhatsApp will no longer be available, the company said on the website. Starting July 21, users will no longer be able to add money to their accounts, Novi said, advising users to withdraw their balance “as soon as possible.”

“Novi users should withdraw their remaining balance on their Novi accounts before the closure date. People can either transfer their remaining balance to their bank account or withdraw the digital funds as cash where applicable,” the company said.

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In other words, Novi users will not be able to access their accounts after September 1, and hence cannot retrieve account information like their transaction history. 

The company released Novi last October in a beta, or testing, version with the help of the cryptocurrency exchange Coinbase, which acted as Meta’s “custody partner” on the project. The latter offered digital storage and security technologies to help the Novi app secure people’s funds, the crypto exchange said in October in a corporate blog post

Novi was supposed to be a safe way for people to send and receive crypto, and at one point it was supposed to work with Diem, Meta’s first cryptocurrency project. However, Diem was shut down in February this year. The project launched as Libra in 2019, ran into opposition from regulators and policy-makers. Facebook's former crypto head While it initially had participation from large payments firms like Visa, PayPal, eBay, Mastercard and more, most of them left the project and Diem co-creator David Marcus said on Twitter the idea might fare better with a more "acceptable" promoter.

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The company also noted that market acceptance of its digital payments products are subject to “significant uncertainty" and hence the company couldn’t be sure that such products will be offered in “a timely manner, or at all". 
The Diem Association, which was in charge of the project and functioned as an independent body, announced that its intellectual property and other assets related to running the Diem Payment Network were sold to Silvergate Capital, the holding company for California-based Silvergate Bank.

Meta’s decision to withdraw its crypto projects reflects the overall market for cryptocurrency that is in a dire strait. The global market cap of these digital assets has shrunk below $1 trillion. Starting from Bitcoin and Ethereum, the prices of almost every coin have dropped substantially from their all-time highs, with no immediate recovery in sight amid the ongoing bear market. 

While the Terra (LUNA) crash in May last marked the first major setback for crypto investors, analysts warn of a far bigger collapse may be just around the corner.

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