Facebook is set to introduce the Novi cryptocurrency wallet linked to the Diem blockchain-based payment system, even as the social network giant contends with new claims by the federal government that it is abusing its market influence.
In a blog post Wednesday, Facebook's financial services unit director David Marcus said Novi could play a major role in fixing the world's payments structure that he said is too slow and costly.
Marcus, also a board member of Diem, argued the present cash-run economy had rendered 1.6 billion people "unbanked or underbanked," and still, the entire system could really use some speed.
Marcus said Novi had secured licenses or approvals in almost every U.S. state. The new payment system will offer free peer-to-peer payments locally and internationally and earn profits from merchant services similar to other digital wallets.
A former PayPal chief hired by Facebook in 2018 to lead the company's blockchain programs, Marcus said Novi is ready "to come to the market."
Marcus' online disclosure came a day before the U.S. Federal Trade Commission (FTC) refiled a claim that alleged Facebook was operating an unregistered "buy or bury" scheme.
In the face of widespread worries surrounding the social network's business practices, it is unclear whether the FTC's action could affect Facebook's goals in the crypto space.
The Diem Association is a not-for-profit organization that oversees the development of the diem stablecoin. Stablecoins are virtual assets linked to a fiat currency or a currency issued by a central bank.
Novi is designed to let users add funds to their digital wallets that would be converted to a Diem virtual currency that could then be transmitted to others globally.
The Diem initiative was originally planned to roll out in June this year, but it was canceled because of the constant government inspection of Facebook.
Diem, first named Libra, was originally intended to be supported by a host of currencies, but it is now meant to launch as a single coin backed by the U.S. dollar.
In May, Diem announced a collaboration with Silvergate Capital, a bank holding firm whose subsidiary, Silvergate Bank, provides banking for companies in the digital currency space.
