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WhatsApp is testing a new crypto feature that facilitates sending money as seamlessly as sending a chat using Pax Dollar (USDP).
Instant messaging platform WhatsApp will soon allow users to send and receive money using crypto wallet Novi. The service will be facilitated by the Pax Dollar (USDP), a Paxos-issued stablecoin pegged to the US dollar.
According to Novi’s vice president of product Stephane Kasriel, the feature is currently undergoing a pilot test run. Kasriel however noted that it would only be open to a limited number of users in the US.
There's a new way to try the @Novi digital wallet. Starting today, a limited number of people in the US will be able to send and receive money using Novi on @WhatsApp, making sending money to family and friends as easy as sending a message. 💸💬 pic.twitter.com/dGz3lejri7
— Stephane Kasriel (@skasriel) December 8, 2021
How the WhatsApp Money Feature Works
The idea for the WhatsApp money initiative is for users to send payments in a fashion similar to sending any other WhatsApp attachment. Users will be able to access the feature from their WhatsApp chat screens, whereupon they can also select payment amounts. They will then proceed to another section to log in the recipient’s details, link their debit cards with Novi – and finally send.
Kasriel and WhatsApp’s Will Cathcart say that using Novi will not affect the end-to-end encrypted privacy of WhatsApp’s calls and personal messages. In addition, the digital wallet’s site states that there are no restrictions on transacting payments. These include zero fees for sending or receiving money, and zero limits to the frequency of payments made. It also includes zero fees on maintaining a balance in one’s Novi account or choosing to withdraw it to a bank account.
Meta Platforms (formerly Facebook) worked on this wallet app initiative for several months. The Novi pilot was initially slated to take place in the US – as well as Guatemala. However, as it stands, users in Guatemala will not be privy to the new WhatsApp functionality. Instead, they will only be able to send payments using Novi as a standalone app.
Payment Project Was Many Months in the Making
The pilot initiative originated from Meta’s planned digital currency project called Diem (formerly known as Libra). The social media giant first made the official announcement for a permissioned blockchain-based payment system back in 2019. The plan was to peg a native crypto to a suite of low volatility assets instead of just one specific token. This would then integrate with Calibra, a digital wallet developed by Meta. The end goal of this project was to facilitate global payments with minimal fees compared to traditional methods.
However, Meta had to scale back its global plans amid regulatory concerns, and a lot has changed since then. The Calibra initiative morphed over time to become Novi, which in turn ended up launching with USDP (a third-party initiative) instead of Diem. However, Meta also stated that it remains committed to Diem, and would adopt it once it secures regulatory approval.
Meta also uses the leading crypto exchange Coinbase as its custody partner.