WhatsApp is piloting a new cryptocurrency tool for money transfers.

WhatsApp said that it is testing a new feature that would allow US users to transmit money without any fees by utilizing cryptocurrencies. The new payment service is another illustration of how digital currencies are becoming increasingly recognized in the conventional banking sector in the United States.

The crypto functionality will be backed by Novi, a recently established digital wallet owned by Whatsapp parent firm Meta (previously Facebook) that consumers may use to transmit money worldwide. The business began testing Novi six weeks ago with a limited number of users in Guatemala and the United States. In a joint post on Wednesday, WhatsApp CEO Will Cathcart and Novi CEO Stephane Kasriel announced that Novi will be available to certain WhatsApp users in the United States on a temporary basis.

Cathcart said:

People use WhatsApp to coordinate sending money to loved ones and now Novi will help them do that securely, instantly and with no fees

During the trial period, anybody using Novi will be able to transact using the U.S. Pax Dollar (USDP), a licensed cryptocurrency produced by the New York-based blockchain business Paxos Trust. According to the Novi website, USDP is intended to be connected to the strength of the currency in order to prevent the price fluctuations associated with Bitcoin and other cryptocurrencies. One Pax Dollar is the same as one US dollar. Users deposit funds into their Novi accounts via the free app, which instantly translates US dollars to Pax.

Users who have access to WhatsApp-Novi can activate the function by hitting the paper-clip icon and then choosing Payment. There are no costs for sending or receiving money, and there is no restriction on the number of times payments may be made, according to Novi.

It’s unknown what Meta’s long-term goals for Novi are, but if the service survives, it will join an already crowded market of money-transfer applications such as Zelle, Venmo, and Cash app.

According to Kasriel, the Novi pilot test has allowed the firm to “learn which features and functionality are most important to people, and focus our efforts on making those even better.” Kasriel and Cathcart did not provide a date for when the service will be offered to all users or in other parts of the world.

Patrick

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