Facebook’s Novi Cryptocurrency Project hopes to cut platform-incurred costs by offering fee-free payments on its services as a result of “bypassing” traditional financial providers.

Of course, it came as no surprise to know that this project has faced several setbacks, given the nature of its scope, challenges were meant to be encountered. A lot of regions are refusing to support the initiative, with initial big-name supporters backing out due to certain political controversy.

Despite several challenges that have caused the project to progress at a pace slower than what Facebook would’ve liked, it still manages to inch it’s way through as Novi chief David Marcus announced that it’ll be proceeding to the next major step which is the launch of its ‘Novi Digital Wallet’ in the US and Guatemala. The digital wallet is set to forward Facebook crypto payments and allows users to both send and receive money between the two regions.

Marcus explains:

“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.”

Gauging test results, the key use case to be looked at will be remittance, specifically looking at money sent back to families for each region. Facebook has long highlighted remittance as being a key feature in this respect, noting that Indian citizens transfer more funds through remittance than anyone else in the world. This now presents Facebook with a significant business incentive that if it can manage to build a key financial platform, then it potentially attracts substantially more users, especially from developing markets.

“The remittance corridor is an important one. In Guatemala, 56% of people lack access to financial services, despite nearly 100% having mobile phones. Money sent from family and friends abroad contributes more than 14% of GDP and 90% of those remittances come from the US.”

Facebook envisions that if it allows people to move money around its channels, it’ll encourage more eCommerce behavior, thus making the platform even more of a key element of the digital infrastructure present within these regions. However, as Marcus notes, Facebook is nowhere near achieving a bare-minimum format yet.

Marcus goes on to say:

“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.”

The Wrap

A large portion of the crypto market remains untested and its broader potential is known only by those who have already established a foundation within its environment. This being the case, the adoption of crypto-based financial services raises a lot of questions and often calls the attention of many critics and, to Facebook’s dismay, an equal amount of detractors opposing the idea. The skepticism behind cryptocurrency is logically backed, attested to by the fact that these operate on a digital ledger, thus being more difficult to reverse in the event of erroneous transactions while simultaneously being more vulnerable and likely to be used for scamming.

On the bright side, there is potential for cryptocurrency to be more beneficial to communities and regions without an effective banking system in place. Furthermore, the increasing adoption of certain crypto-based assets, NFT to be precise, stands to at least provide some level of contrast to the otherwise prominently negative connotation of cryptocurrency. The thing is that Facebook remains hopeful for the approval of the project, so what’s best to do now is to see if that hope actually bears fruit.

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Sources

https://bit.ly/2Z9UR0J