Facebook taps Coinbase for its Novi digital wallet project

The social media giant has partnered with Coinbase on its Novi wallet project

Coinbase to provide custody service to the Novi wallet

Facebook has chosen Coinbase to serve as its custody partner as it prepares to launch its Novi digital wallet. It is a huge deal for Coinbase, which is currently the leading crypto exchange in the United States.

In a blog post yesterday, Coinbase announced that Facebook had chosen it as its custody partner for its pilot of Novi, a new digital wallet that enables people to send and receive money abroad instantly, securely, and with no fees.

For the pilot, Coinbase is supporting Novi via its Coinbase Custody. Coinbase Custody has been tasked with keeping user funds secure with its proprietary, fully segregated cold storage capability for managing private keys.

Novi users can be a part of the pilot by purchasing Pax Dollar (USDP) through their Novi account, which Novi will hold on deposit with Coinbase Custody. Afterward, Novi users can transfer USDP between each other instantaneously.

As a qualified custodian and a New York limited purpose trust company, Novi users’ funds will be held within Coinbase Custody Trust Company. Furthermore, the Coinbase Custody Trust Company is regulated by the New York Department of Financial Services and is a fiduciary under New York State banking law.

U.S. lawmakers Urge Facebook to suspend its Novi wallet launch

A group of U.S. lawmakers called on Facebook to halt its cryptocurrency and digital wallet project Novi hours after its pilot launch began yesterday. The lawmakers said Facebook could not be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.

Per the senators, the social media giant failed to explain how its crypto project Diem will prevent illicit financial flow and other criminal activity and maintain users’ privacy in addition to financial stability.