Meta’s Diem Crypto Project Seizes Nothing After All as Novi Shuts Down

Meta’s Diem Crypto Project Seizes Nothing After All as Novi Shuts Down
Image: Chip Somodevilla/ Getty Images

Meta’s cryptocurrency payments wallet, Novi, will be laid to rest in September, with the social media giant all but ending its Libra, cum Diem, stablecoin experiment.

The Novi landing page is a sad place for crypto enthusiasts who were banking on the Zuck empire to bring the Web3 promise to the masses.

“The Novi pilot is ending soon,” the page reads.

“Novi will no longer be available for use after September 1. Before Novi goes away, we’ve made it easy for you to get your remaining balance and download your Novi information.”

The latter part of that statement refers to people that for some reason sunk their money into Meta’s passion project. The page continues to explain how people can withdraw any remaining balance in their Novi account before September.

Novi, originally known as Calibra, had been Meta’s wallet for its Libra stablecoin (later renamed Diem). Confused?

In November of 2019, Facebook announced Libra. Libra first rolled out with the goal of creating a “simple global payment system and financial infrastructure that empowers billions of people”, Libra was shortly renamed to Diem.

But because this was a Facebook brand, just about everyone was sceptical; regulators from the EU and the U.S. alike expressed scepticism about the project, as did the Reserve Bank of Australia (RBA), in 2020 saying the announcement of Libra had prompted it to closely consider the potential risks and benefits of cryptocurrencies, with a particular focus on stablecoins. Interestingly, the RBA said it wasn’t convinced a Facebook coin would take off down under.

It wasn’t just global regulators, partners and the project’s initial backers (like PayPal, Mastercard and Visa) jumped ship following months of regulatory scrutiny, and things only got worse from there. First came the name change, and then came the narrowed scope: what was first supposed to be a globally-supported cryptocurrency became one that was only available in the U.S. after it failed to get approval from Swiss payment regulators.

Executives on the team responsible for overseeing Diem’s push into the mainstream, like David Marcus, left the company soon after. The Novi blockchain wallet that Facebook had created to carry the digital currency announced towards the end of last year that it would be trialling payments with Pax Dollars (USDP), instead of Diem like originally planned.

We knew this was coming, however.

In February, we reported that an outside investment firm, Silvergate Bank, confirmed it was buying $US182 million (around $250 million at the time)-worth of Diem assets from the tech giant.

Although Meta decided to kill the Novi pilot, CoinBase is reporting that Meta has plans to repurpose the technology for future products, including its metaverse initiative.

“We are already leveraging the years spent on building capabilities for Meta overall on blockchain and introducing new products, such as digital collectibles,” Meta is reported as telling CoinBase.

“You can expect to see more from us in the Web3 space because we are very optimistic about the value these technologies can bring to people and businesses in the metaverse.”

The official closure of Meta’s crypto play comes amid some embarrassing times for those on the crypto train. There’s a tonne out there you can read about that, but our favourite pull quote is from executives at China’s Blockchain-based Service Network (BSN), which is a state-backed initiative designed to drive the commercial adoption of blockchain technology.

According to Forbes, they have branded bitcoin and cryptocurrency:

“The biggest Ponzi scheme in human history.”