Facebook Begins Designing A Digital Wallet To Hold Cryptocurrencies

David Marcus says the US is already lagging behind China at an alarming rate when it comes to cryptocurrencies. (photo: facebook)

JAKARTA - Facebook is preparing to launch a digital wallet that will allow users to store cryptocurrencies. Facebook's Chief Financial Officer David Marcus told The Information that the platform "feels quite committed" to launching its digital wallet, known as Novi, in late 2021.

Marcus said he would rather release Novi with Diem, a form of digital currency Facebook is working on called a stablecoin, which will be linked to the US dollar. However, the launch of Diem is currently still in the air.

"In theory, Novi could launch before Diem, but that would mean launching without Diem and that's not necessarily something we want to do", Marcus, a Diem board member, told media in the US.

Marcus says launching a wallet without Diem is a last resort. "It all depends on how long it takes Diem to actually go live and it's not something I personally pay attention to", he said.

On Tuesday, August 24, Marcus told Bloomberg Television that the US is already lagging behind China at an alarming rate when it comes to accepting digital currencies.

Allowing 2.9 billion Facebook users to access the $2 trillion crypto market could be a game-changer today.

Facebook first announced its own cryptocurrency in 2019, calling it “Libra”. But after rejection from US lawmakers, they moved operations to Switzerland and renamed the currency "Diem".

In an August 18 blog post, Marcus said Diem could become an integral part of secure digital banking.

“When it comes to anti-money laundering, counter-terrorist funding, sanctions, and tax compliance – well-designed stablecoins and their wallet ecosystems have the potential to enhance traditional implementations of those controls”, he wrote.

“Built and configured the right way, stablecoins and wallets put customer due diligence at the center of their approach to compliance”, he added.

Marcus told Bloomberg Television that Facebook is also "definitely looking" to incorporate products and features related to non-exchangeable tokens, or NFTs, into Novi.

"We're definitely looking at a number of ways to get involved in the space because we think we're in a very good position to do that", he said.

"When you have a good crypto wallet like Novi, you also have to think about how to help consumers support NFT", he added. "We must be thinking about this".

He warns that scaling up with Novi will take time. Given the reach of Facebook, some thought that Novi would soon be used by hundreds of millions of people globally, he wrote in a blog post. "As we know from our experience launching and scaling other payment experiences, this is not the way it's going to be", said Marcus.

“Users have to choose, 'no matter how long they have been using Facebook and do full due diligence to open an account'”, he said.

"Novi also cannot operate in certain jurisdictions until it receives the appropriate license and complies with local regulations and standards", he added. “So we will start in a small number of countries".

According to Marcus, currently, Novi is approved in almost every state in the US.