While its previous attempt seems to have tanked due to privacy concerns and other reasons, Facebook hasn't given up on its digital currency.
Facebook, the foremost and largest social network, previously tried to launch a cryptocurrency. That quickly went south when many objections arose from the government and several other influential people over whether such an influential company should delve into digital finance.
Major Signals
- Facebook is backing another cryptocurrency called Diem.
- Diem is almost the same as the previous currency, called Libra.
- The currency hopes to be launched in 2021.
Facebook, founded by Mark Zuckerberg, currently has over 2 billion users signed up on the online platform. That is over ten times of even the most populated country in the world. That is also close to a third of the total number of people on earth.
In 2016 during the US Presidential elections, it ran into a lot of controversy concerning its role in the leaking of client data and how it will use it to manipulate people to vote during the election. Since then, the government has been given Facebook the side-eye, especially the US government.
Libra was designed to be a stable coin backed by companies, banks, etc. But it was struck out because the regulators were concerned about privacy and how quickly down south it could all go.
In a discussion released on Tuesday, Facebook-backed digital currency "Diem," previously known as the libra, said it is taking a "process approach" to its introduction.
The Switzerland-based non-profit Diem Association, which monitors the progress of Diem, intends to open this year when the news agency nominated an individual who knows the issue, a pilot with a stablecoin attached to the US dollar.
This pilot is limited and will place emphasis on transactions between personal citizens, they explained, adding that users can also buy goods and pay for purchases.
Since the announcement by the social media giant in June 2019, the proposed Facebook cryptocurrency project is strongly opposed by different regulators around the world.
The original objective of the cryptocurrency was to be a universal currency linked to a basket of sovereign currencies, such as the US dollar and the euro. However, the group revised its plan after extensive scrutiny by the regulators. It is now aimed at launching multiple, government-supported currencies supported stablecoins and one multi-monitor coin.
Diem has been discussing payment licensing with Swiss financial regulators now. Catalini told the news agency that the launching initiative is a major step in the dialog with regulators. People will gradually adapt and use applications in various aspects in different functionalities.
He also stated that all members must be extensively monitored (KYC). "We will start to experiment with a small number of users and a small number of players once we receive green light [from regulators]," he clarified.
Conclusion
Facebook's previous tries to establish a cryptocurrency in 2019, when and cryptocurrency had not gotten the level of adoption it enjoys right now in various sectors of society. This new cryptocurrency has gotten rid of most of the concerns that the previous one had, and according to the company backing it, they are keeping it simple for now.
This new move to relaunch their cryptocurrency could work. this is coming at a time when crypto adoption is much much more widespread, and even governments are setting up their digital currencies. The crypto market volume growth and the exposure of many people to cryptocurrency are some of the games to be expected from this new currency.
Question of the day
What do you think of Facebook's new venture? Let us know in the comments.
