Facebook-backed digital currency project Diem could launch its first stablecoin in 2021 as a small-scale pilot, CNBC reported on Tuesday (April 20), citing sources.
The Silicon Valley social media giant moved to roll out a digital currency — Libra — in June 2019 that Facebook had hopes of being a universal currency. The concept faced backlash from international governments and ultimately lost big backers like Mastercard and Visa.
Even after the Libra group changed its plans and moved toward multiple stablecoins backed one-to-one by different government currencies, it has since morphed. The new concept is similar in nature to the original but without the fanfare and controversy — and with a different name, CNBC said.
The Switzerland-based nonprofit Diem Association is aiming this year to introduce a pilot with a single stablecoin pegged to the U.S. dollar, a source told CNBC. In terms of scale, the pilot will be smaller and will target transactions between individual consumers.
When it was first rolled out, Facebook’s Diem hit major scrutiny, in part due to its 2.8 billion monthly active users in 2020 Q4. Central bankers and politicians were worried that the coin currency could threaten monetary stability. Further, monetary officials were concerned that digital assets could lead to more money laundering. Another concern had to do with security measures and how Facebook planned to protect users’ privacy.
Regardless of the controversy, sources also told CNBC that there also could be an option for users to buy goods and purchases. No date or time has been confirmed regarding the launch.
“It’s really drifted off the radar in a way that’s quite striking,” Michael Casey, the chief content officer of the cryptocurrency publication CoinDesk, said, per CNBC.
Facebook’s original concept for a stablecoin called Libra was supposed to launch at the end of last year. The initial goal was to get approval from the Swiss Financial Market Supervisory Authority (FINMA) and possibly roll it out in January.
Digital currency has been met with criticism by lawmakers and regulators both in the U.S. and across the pond. Regardless, the Libra debut was anticipated to become a reality in December 2020.
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