The messaging service WhatsApp said this week that it is testing a new feature that allows US users to send money without paying fees, using cryptocurrencies. The new payment service marks another example of how digital currencies are increasingly accepted in the.
The crypto feature will be powered by Novi, a recently launched digital wallet owned by What’sApp’s parent company Meta (formerly Facebook) that people can use to send money internationally. The company began testing Novi six weeks ago among a select group of users in Guatemala and the United States. joint Tweet on Wednesday, WhatsApp CEO Will Cathcart and Novi CEO Stephane Kasriel said that Novi would be available to some WhatsApp users in the US on a trial basis.
“People use WhatsApp to coordinate sending money to their loved ones and now Novi will help them do it safely, instantly and free of charge,” Cathcart tweeted.
Anyone using Novi in the trial period will send money via US Pax Dollar (USDP), a regulated cryptocurrency issued by New York’s blockchain company Paxos Trust. The USDP is designed to be pegged to the value of the dollar, according to the Novi website, as a way to avoid the kind of price volatility associated with Bitcoin and other cryptocurrencies. One Pax Dollar is equal to one US Dollar. Users add money to their Novi account through the free app, which automatically converts those US dollars into Pax.
Users with access to WhatsApp-Novi can select the feature by pressing a paperclip icon and then selecting Payment. There are no fees to send or receive money and there is no limit on the number of times payments can be made, Novi said.
It’s unclear what Meta’s long-term ambitions are for Novi, but if the service holds up, it would join an already crowded market of money transfer apps like the Zelle app, Venmo, and Cash.
Kasriel said Novi’s pilot test has allowed the company to “learn which features and functionality are most important to people and focus our efforts on improving them further.” Kasriel and Cathcart did not give a timeline of when the service could be open to all users or available in other countries.
Where is Diem?
Meta’s use of crypto dates back to two years ago when Facebookcalled Libra. The Libra project attracted intense scrutiny from the federal government and was ultimately reduced to a shell of what it was intended to be. Later renamed Diem, it was the proposed currency for the Novi launch until regulatory issues forced Meta to switch to Pax.
Novi comes at a time when Pax Dollars and other digital currencies are starting to win over more American investors. Bitcoin hit a record price of nearly $ 50,000 in February, in part because more companies accept it as a form of payment.
Ethereum and dogecoin also hit record prices earlier this year, while celebrities like Snoop Dogg, Paris Hilton, Kanye West, and others have thrown their names behind digital currencies of their liking. Still, a new survey found that money managers believe that highly volatile cryptocurrencies are not a good option for most retail investors.