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Meta Ends Its Novi Digital Wallet Experiment
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Meta Ends Its Novi Digital Wallet Experiment

Story Highlights

Meta Platform is not going to shut down Novi the same way it did with Diem. The shift in strategy may signal regrets over how it handled the Diem divestiture or may be the circumstances have just changed.

Facebook parent Meta Platforms (META) has decided to end its Novi digital wallet experiment. Novi is a crypto-based international money transfer service that Meta rolled out in the U.S. and Guatemala in October 2021. It was a part of Meta’s Diem crypto project that shut down in January 2022. 

Novi will shut down on September 1. Users have been advised to withdraw their funds before the service stops working. Novi users can transfer funds to their bank account or withdraw them as cash. 

Apart from the standalone Novi app, the service was also available on WhatsApp, enabling people to easily send money to their contacts across the messaging app. Novi facilitates the money transfers through the dollar-pegged Paxos stablecoin, with Coinbase (COIN) acting as the custodian of the funds. 

Novi Brand Technology Remains

When Diem shut down, Meta and its partners sold the technology and assets associated with the project to Silvergate Capital for about $200 million. However, Meta is taking a different approach with Novi. It is going to retain Novi’s technology even as it ends the service. The shift in strategy may be a signal that circumstances have changed or Meta regrets giving up on Diem’s valuable technology. 

According to a Bloomberg report, Meta has plans to put Novi’s technology to use in future products. For instance, Meta’s metaverse and NFT projects could benefit from the Novi technology.

Wall Street’s Take

The Street is cautiously optimistic about Meta Platforms stock with a Moderate Buy consensus rating, based on 28 Buys, eight Holds, and one Sell. The average Meta Platforms price forecast of $267.43 implies 67% upside potential to current levels. Shares have declined about 53% year-to-date.

Blogger Opinions

TipRanks data shows that financial blogger opinions are 89% Bullish on META, compared to a sector average of 65%.

Key Takeaway for Investors

Meta faced strong regulatory headwinds with its grand crypto project, comprising Diem and Novi. While the crypto experiment may have come to an unceremonious end, Meta has learned important lessons, and it can apply those in its future efforts.

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