Diem, Facebook’s new cryptocurrency, is expected to be launched by the end of the year, according to CNBC.
First proposed in July 2019 under the name Libra, Facebook’s cryptocurrency, now called Diem, is expected to be launched by the end of the year.
The digital asset was initially designed to be a global currency linked to national currencies, such as the US dollar and the euro. Facebook’s goal was to revolutionize finance with a global digital currency. However, regulatory bodies came and since then, a lot has changed for the project.
After facing strong opposition from global regulators, Diem Association losts major partners. Among them, the Visa and Mastercard credit card brands.
Thus, the group ended up diluting its plans, opting for several stablecoins supported by different currencies supported by the government, as well as a multi-currency currency. According to CNBC, the Diem Association intends to launch a pilot with Diem linked only to the US dollar.
“A big step in our dialogue with regulators was a phased approach to launch,” said Christian Catalini, Diem’s chief economist, to CNBC last month.
Watch the video below:
According to anonymous sources, the Diem Association aims to launch in 2021 a pilot with a single stable currency pegged to the US dollar.
The same source said that the pilot will be on a small scale, focusing mainly on transactions between individual consumers. In addition, there are chances of having an option for them to buy goods and purchases. However, there is no confirmed release date and therefore the weather may change.
Experts say the project went off the radar in a very surprising way. The Diem was met with intense scrutiny when launched for the first time.
Given Facebook’s wide reach in the last quarter of 2020 – about 2.8 billion active users – politicians and bankers feared that the cryptocurrency would pose some threat to monetary stability and potentially allow money laundering. In addition, the involvement of the social network also meant that there were concerns about how it would protect users’ privacy.
Still according to crypto experts, Facebook’s involvement posed a strong threat to the dominance of the US dollar. Two months after the Libra project was introduced, former Bank of England governor Mark Carney proposed a new digital currency based on a global basket of goods that could diminish the dollar’s status as a world reserve currency.
This year, Diem could break through the gates, experts say
Between 2020 and 2021, the Facebook token drastically changed from a naive blockchain to a sophisticated one. Such a change makes it possible to perceive the cryptocurrency to possible questions that the regulators may have.
In addition, experts say the move is expected to surpass the gates this year. These also point out that it would be a missed opportunity if it were not.
Finally, professionals point out that this is just one of several initiatives going on in the crypto ecosystem. In addition, this is similar to Tesla’s purchase of USD $ 1.5 billion in cryptography.
In fact, Diem – or Libra – may have been the big crypto story in 2019. However, Bitcoin and other cryptocurrencies have gained significant momentum in the past year, with bitcoin recently reaching a new record above USD $ 60,000 and with big companies like Square and Tesla betting heavily on digital currency.
Diem structure may issue government digital currencies
Almost two years after its inauguration, the Diem Association lost several members and executives.
At the same time, the digital token underwent a complete overhaul, changing the Libra brand earlier this year and reinforcing its leadership team with major hires. Among them, that of CEO Stuart Levey, former legal director of HSBC.
According to a report by Citi bank, the Diem can become not only a Facebook currency, but also a provider of digital currency issuing services to governments. Currently, Facebook’s cryptocurrency is under negotiation with Swiss banks. The data is from the updated Diem documentation.
In addition, Diem’s whitepaper points out that the cryptocurrency can provide an infrastructure in addition to that provided by central banks. According to the whitepaper, the project is open to discussions with any central bank that may be interested in adding its currency to the Diem network.
This could provide more functionality and resources in the area of payments, thus contributing to a wider acceptance of government digital currencies by individuals and companies.
Remember that Facebook is not the first to plan to provide an infrastructure for issuing digital currencies. Ripple would also be testing a blockchain that provides central banks with a solution for issuing and managing cryptocurrencies. Stellar and Cardano are also talking to governments around the world to offer this type of infrastructure.