Booming Crypto Assets, Facebook Quickly Releases Diem Digital Money
CNBC International - Facebook's plans to launch its own cryptocurrency have not died down. This intention will be realized this year after changing the name from Libra to Diem.
Reported by CNBC International, Tuesday (20/4/2021), Facebook's cryptocurrency was first introduced in June 2019 under the name libra, this digital token was originally intended as a universal currency that is used to transfer money as easily as sending a message.
But after facing strong opposition from regulators around the world, the organization overseeing the project lost key backers including Visa and Mastercard. The group eventually watered down its plan, choosing several “stablecoins” or digital money that was linked directly to official money issued by the central bank such as the US dollar and the euro.
Now known as Diem, the Facebook-backed digital coin is expected to launch later this year, albeit in a much more limited form. Diem is currently in talks with Swiss financial regulators to obtain a payments license, an important step that will put the organization further on the path towards its digital currency project.
"A big step up from our dialogue with regulators has been a phased approach to roll out," Christian Catalini, Diem's chief economist, told CNBC's Joumanna Bercetche last month.
“We will be phasing out different functions and uses, applications in different areas,” he said, adding that members of these cryptocurrencies – both large and small – must undergo strict anti-money laundering checks.
However, some consultants have responded cynically to this. Given Facebook's broad reach, which had 2.8 billion monthly active users in the fourth quarter of 2020, central banks and politicians fear the currency could threaten monetary stability and potentially allow money laundering.
Facebook's involvement also means there are concerns about how Facebook will protect user privacy. “That is a tremendous challenge to the international order, because the backlash is so strong,” said Michael Casey, chief content officer of cryptocurrency media CoinDesk.
One big concern, Casey said, was that Diem was threatening the dominance of the US dollar. Two months after Facebook launched Libra, former Bank of England Governor Mark Carney proposed a new digital currency based on the global basket of goods that could reduce the dollar's status as the world's reserve currency.
Diem's technology has "changed dramatically over the past year and a half from a naive blockchain to a very sophisticated blockchain that you can see trying to answer some of the questions regulators have," said Ran Goldi, CEO of Digital Assets Group, which is building the infrastructure for traders. accept diem as payment method.
Even so, there are some opinions that are optimistic about this digital currency, given its extraordinary prospects around the world.
“I think it will pass the gates this year,” said Michael Gronager, CEO of blockchain analytics firm Chainalysis. “It will be an opportunity not to be missed,” he added.