Diem, formerly known as Libra, the digital currency is expected to be launched as part of a small test project in the coming month, during which time it will only be pegged to the value of the U.S. dollar. Transactions are expected to be limited to individual-to-individual, with the pilot scheme set to be run initially on only a small scale.
Facebook first announced its digital currency plans back in 2019.
The launch of Diem digital currency has been several years in the making. Facebook first announced plans to explore digital currencies back in 2019. At the time, Facebook helped form a consortium of technology and payments companies with an interest in the project, which included payment giants such as Visa, Mastercard, Stripe, and PayPal. The announcement received a lot of flak from regulators, which caused several members of the association to pull from the project. Regulators raised concern about the potential impact of a Facebook digital currency on global financial stability.
The digital currency project is still on track.
The backlash from regulators worldwide forced the organization to scale back its plans and rebrand from Libra to Diem, with the project now much less ambitious than initially envisioned. Despite the legal challenges, Diem officials have previously suggested that the digital currency project is still on track, still progressing faster towards an eventual rollout. Diem Chief Economist Christian Catalini said the phased approach to launch was part of the agreed approach with regulators on the way to a future wider launch. “A big step of our dialogue with regulators has been a phased approach to launch. We are going to be phasing in different functionalities and use cases, applications in different areas,” Catalini noted.