David Marcus says Novi digital wallet ready for launch

David Marcus, head of Facebook’s payments division, criticised the existing US financial infrastructure and said the Novi digital wallet is ready to launch.

A lot has been said about stablecoins, payments, and Facebook and Novi’s potential role to improve what I see as an unacceptable status quo of our payment systems that still leave too many people behind. Here’s my take: https://t.co/MPva0LOcGN

— David Marcus (@davidmarcus) August 18, 2021

Marcus noted that about 1.7 billion people worldwide lack access to banking infrastructure. Among them are 62 million Americans, “stuck in a cash economy.”

“Here in America, our payments infrastructure is arguably the worst among all developed countries and is falling further behind, while China is decisively and rapidly building a system that will allow the digital yuan to compete with the dollar for the title of global reserve currency,” said the head of Facebook Financial.

According to Marcus, a payments network integrated with stablecoins could transfer transactions more cheaply, faster and more securely. It would also be more open and inclusive.

The head of Facebook Financial stressed that “not all stablecoins are created equal.” In his view, the quality of such products depends on how transparent the issuers’ reserves are, to what extent they comply with regulatory requirements, and how they protect consumers.

“A well-designed stablecoin is always backed 1:1, its reserves consist of cash held in US banks and short-term Treasury securities, and the issuer keeps capital as a buffer to protect consumers,” he added.

Marcus said that Facebook remains true to its initial promises and will not launch Novi without prior regulator approval. The company is conducting constructive consultations with supervisory authorities around the world and has already made significant progress.

“In the United States we have obtained licenses or approvals to launch Novi in virtually every state. […] Diem Association [which runs the Diem stablecoin] has become an independent organization, independently engaging with regulators in the United States and around the world,” Marcus said.

The head of Facebook Financial noted that, despite concerns, the company deserves a “fair chance” to change the financial system. Marcus called the bias toward the tech giant “deeply un-American” and reminded that he has been part of the payments industry since 2009.

“Changes have long been due. One way or another this will happen. Novi is ready to go to market. … We believe delaying an initiative offering cheaper and more accessible digital payments,” he concluded.

Earlier reports suggested Facebook would abandon Diem in favour of third-party stablecoins.

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