Facebook’s much talked about cryptocurrency launch of Libra has been ditched and instead the social media giant is part of a new digital currency named Diem. It will be supported by the Diem Association, which consists of 27 members, of which Facebook is one.
Facebook, Inc. is hoping to launch Diem in January of this year. David Marcus, head of Facebook Financial, told his audiences at the Singapore FinTech festival that he hoped the company could participate in changing the financial services industry by launching Diem (previously named Libra), Facebook’s proposed digital currency for use on its social network, and Novi, the accompanying wallet for its Libra blockchain, on its platform.
After the announcement of launching its own digital currency, concerns by central banks were raised worldwide, expressing that the issuance of digital currency will cause financial instability and create challenges for traditional currency. The project has been mired in controversy since it was announced in 2019 and has undergone considerable changes in scale and composition.
Diem is more than just a renaming of the Libra blockchain. The developers behind this concept decided it was best to alter its plans for Libra to speed up the regulatory approval process. The name change is part of these alterations. Developers decided that the Libra name was no longer appropriate because it was tied to an earlier iteration of the project.
One of the main changes that occurred when Libra became Diem was the reduction of Facebook in the equation. Lawmakers want organisational independence from the social media network if the project is ever to gain enough trust to win regulatory approval. The project recently revised its white paper with the goal to reduce Facebook’s role.
Will Diem launch in 2021?
Most industry commentators believe that Diem will be introduced in January in spite of the many delays of the launch of the original libra.
But it may not be available immediately in every country. Graeme Moore, head of tokenisation at Polymath says: ‘Based on what we’re hearing from various regulators around the world, diem may have a limited launch in some countries in January 2021.’
The benefits of Diem
Diem brings some significant advantages to the market and to individual users. The token would have the benefit of being instantly adopted. The launch of Diem would signal a new era in cryptocurrency usage. Facebook has billions of global users who would all suddenly become cryptocurrency users. The effects of such a fast rollout would help to educate masses of people on the endless advantages of blockchain technology. Both consumers and businesses can conduct instantaneous, low-cost, highly secure transactions using this network. Facebook users could send payments internationally in seconds. This flexibility and freedom could help to cement Diem as a major global currency in only weeks.