Key Insights:

• Novi deposits and withdrawals will cease on September 1.

• The crypto wallet pilot only ran in Guatemala and selected US locations.

• Meta has faced increased scrutiny over its crypto and Metaverse ambitions.

In an announcement on its website, the company stated that Novi would no longer be available for use after September 1.

The social media firm’s grand crypto plans have come crashing down along with markets as it phases out the Novi wallet and advises users of the pilot program on how to withdraw funds.

The Novi crypto wallet launched with a pilot program in October in Guatemala and select areas in the United States. It had custody support from U.S. exchange giant Coinbase (COIN) and only had support for the Paxos stablecoin USDP.

Meta’s (META) Diem cryptocurrency also never got off the ground as many of the high-profile partners it had bailed out due to increasing scrutiny from lawmakers and financial regulators.

In a note to customers, Meta stated that starting July 21, users will no longer be able to add money to their accounts.

Tainted History

Novi was initially known as Calibra, and Facebook’s failed cryptocurrency Diem was formerly known as Libra. Mark Zuckerberg wanted to enable transferring money as easy as sending a photo. However, Facebook’s torrid reputation for consumer protection and data privacy soon raised red flags among global lawmakers.

Meta was one of the members of the Diem Association, a group of companies that would ultimately control the digital currency. However, several of them, including MasterCard, Visa, PayPal, eBay, and Stripe, got cold feet and pulled out before it even got off the ground.

There has been a lot of criticism over the premise that the dollar-pegged Diem and Novi were just tools to enable Meta to harvest financial data to disseminate more targeted ads. It is no surprise that the firm has axed all of its digital currency aspirations following the growing global scrutiny.

According to Bloomberg, Meta intends to use Novi’s blockchain technology in future projects, such as its Metaverse ambitions and nonfungible tokens (NFTs). “You can expect to see more from us in the Web3 space because we are very optimistic about the value these technologies can bring to people and businesses in the Metaverse,” said a company spokesperson.

The company’s grand Metaverse plans have also been heavily critiqued for the same reasons as its crypto plans were.

Meta Stock Slide

Tech stocks have been hit hard in this bear market, and Meta Platforms Inc. is no exception. Shares in the company are down 42% since the beginning of this year.