First proposed in June 2019 with the name libra, the token was initially intended to be a universal currency tied to a basket of sovereign currencies such as the U.S. dollar and the euro. Since then, a lot has changed for the Facebook-backed cryptocurrency. After facing strong opposition from regulators worldwide, the organization overseeing the project lost major backers, including Visa and Mastercard. Now the Diem Association plans to pilot the digital currency later this year.
Facebook-backed digital coin is expected to launch later this year.
Now known as Diem, the Facebook-backed digital currency is expected to launch later this year, albeit in a much more limited form. Diem won’t come with the same fanfare and controversy of the original idea envisioned by the social media giant nearly two years ago. According to the CNBC report, the Diem Association, the Switzerland-based nonprofit that oversees Diem’s development, intends to launch a pilot with a single stablecoin pegged to the U.S. dollar in 2021. According to the report, this digital currency pilot will be small in scale, focusing largely on transactions between individual consumers.
Diem continues to face scrutiny from regulators.
Facebook’s stablecoin proposal was met with intense scrutiny when it was first announced. Given Facebook’s wide reach — it had 2.8 billion monthly active users in the fourth quarter of 2020 — central bankers and politicians feared the digital currency could threaten monetary stability and potentially enable money laundering. Facebook’s involvement also meant that there were concerns over how it would protect users’ privacy. The Diem Association has lost many members and executives almost two years on from its initial unveiling. Visa, Mastercard, and Stripe were some of the earliest companies to withdraw from the association in the midst of regulatory scrutiny.