A pilot of Facebook’s new crypto coin Diem is likely to be launched this year
Facebook’s previous digital currency, Libra, was heavily criticized by lawmakers around the world when it was announced. The new version of the coin, the Diem, will therefore become a stablecoin pegged to the US dollar.
The Swiss Diem Association, which is responsible for the development and rollout of the digital currency, wants to start small and will therefore focus primarily on monetary transactions between consumers.
Facebook’s digital currency launched in 2019 as a scale and was supposed to revolutionize the financial world. However, this plan soon failed as there was a lot of protest and objection from regulators worldwide.
They feared that Facebook’s development of a universal digital currency could destabilize the global monetary system and become a breeding ground for illegal activities like money laundering.
The criticism led to the loss of key project partners, including Visa and Mastercard. So Facebook decided to downplay its plan and develop a “stablecoin” called Diem, which is linked to traditional currencies like the euro and the dollar.
According to Ran Goldi, CEO of First Digital Assets Group, the Diem Association has made some big changes and matured the coin. “It’s no longer a naive blockchain, it’s a very advanced blockchain where you can see they’ve taken the criticism from regulators to heart.”
Although Visa and Mastercard have previously pulled out of developing the scale, both parties have announced in recent months that they will support it on their platforms.
The Diem Association, which is operated out of Switzerland, has undergone several leadership changes following the exit of its two backers.
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