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People have used the original Kobo very successfully for library borrowing and will be able to use the new one for it as well--but not over WiFi at this point.
The issue for using WiFi is that the books you are borrowing using the libraries Overdrive service have Adobe Digital Edition (ADE) DRM and have to be downloaded through the ADE program on your desktop. If Adobe issues a version of ADE that will work directly on devices, library borrowing then might be able to be done over WiFi.
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