Meta's Crytpo Project Loses Top Executive
Top CEO David Marcus, formerly of PayPal, has announced that he will be departing Meta at the end of the year, dealing yet another blow to the ailing cryptocurrency project. Marcus is departing Meta, according to Bloomberg, to pursue entrepreneurial prospects and pursue other interests outside of the company:
While there's still a lot to do in the wake of Novi's debut - and Marcus is as enthusiastic as ever about the need for change in their payments and banking systems - his entrepreneurial DNA has been nagging me for far too many mornings to ignore. Marcus will be followed as the leader of the Novi project by Stephane Kasriel, the former CEO of UpWork. Despite being introduced with much excitement about two and a half years ago, the Novi project has yet to garner substantial traction as a payment alternative.
Meta had aimed to offer a native digital payment system within Facebook, which would eventually support eCommerce and larger transactions, to help make it a more vital utility for more users throughout the world, when it was first unveiled as 'Libra.' In this regard, India looked to be the main emphasis, where Meta has been seeking to establish its footprint and tap into the country's burgeoning digital ecosystem. Now that India is Facebook's largest user market, furthering its footprint in the Indian tech transition could make Meta a vital provider, supporting a wide range of activities in the region, including, crucially, remittance transfers, which India sees more than any other country.
Those transfers are expensive, with financial providers charging for each transfer, and Meta viewed this as an opportunity to increase the use of its free crypto-based transactions, allowing it to encourage Indian users to make more payments and purchases in its apps. If you already trust Meta with the remittance, expanding to other transaction kinds becomes less of a jump, which was the fundamental promise of the Novi project and the driving force for the company's push. However, soon after the Libra initiative was launched, Indian authorities ruled out the possibility of a Facebook currency operating within their borders. That was a major setback for the project, which soon lost the support of some payment companies and government officials, and appeared certain to fail due to antagonism to both digital payments and Meta in general.
Meta has tried multiple times to reshape the initiative, including rebranding it 'Novi' in May of last year, and just last month, Meta launched a live pilot test of its Novi digital wallet in the United States and Guatemala, allowing users to send and receive money between the two countries. Marcus mentions this as the most recent great jump in his announcement. While it appears to be a significant step forward for the project, broader concerns about cryptocurrency and its security, particularly within Meta's tools, appear to be a long-term hurdle.
Several countries, like China and India, have tried to outright outlaw the usage of cryptocurrencies, while Swedish officials have called on the EU to outright ban crypto projects due to the climate implications of crypto mining. While momentum for crypto-aligned ventures like NFTs online grows, there appears to be an underlying fear of a looming market crash, which will rip a hole in the current crypto bubble and obliterate the perceived value of these rising digital items, according to research.
In many respects, the structure of crypto communities, which are based primarily on goodwill, has created a more welcome and appealing outlet for crypto investment, but on a wider scale, there still appears to be significant danger in these payment systems, with minimal recourse for frauds and theft. As a result, the belief that crypto projects will benefit some of the world's most vulnerable people may be flawed, as it could also expose those same people to wider exploitation. While global banking systems must evolve, the promise of financial sovereignty remains hazy, even in the best-case scenario.
And that's before you consider the broader backlash against Meta and its anti-competitive tactics in the social media and digital advertising marketplaces. Few countries want to see Zuck and Co. gain any more power, thus opposition to its digital payments scheme is likely to persist for some years, putting the Novi project at risk. In this regard, losing Marcus and his enormous expertise and industry clout is a huge loss, and while Meta will go on, it will be interesting to see how Novi evolves in 2022.