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Facebook launches its cryptocurrency service Diem later this year

This is a new currency that is overseen and developed by the Swiss nonprofit Diem Association. This is believed to be a virtual currency tied to the USD and will officially be officially released in 2021.

It is known that the pilot project will initially apply on a small scale, mainly focusing on transactions between individual users. This is an intriguing approach, according to Michael Casey, director of content at CoinDesk.

As for Ran Goldi, CEO of Digital Assets Group, Diem’s ​​technology “has undergone enormous changes in the past year, from a simple blockchain to a very complex one”. The Diem Association is currently building the infrastructure to allow financial institutions to accept the coin as one of the payment methods.

Of course, Diem also faces challenges to legalize it legally. The Diem association is in talks with the Swiss financial regulator to obtain a payment license. This is an important step that will take this organization one step further on the way to launch the digital currency project.

According to Michael Gronager, CEO of blockchain analytics firm Chainalysis, the possibility of Diem will soon be approved this year. “This is one of those moves similar to Tesla’s $ 1.5 billion purchase of Bitcoins. It is only part of the general trend, not the new trend,” he added.

Diem has gone through a complete transformation and has also strengthened the leadership team by hiring Stuart Levey, who used to be HSBC’s Chief Legal Officer, as Chief Operating Officer.

Last month, Christian Catalini, Diem’s ​​chief financial officer, revealed that talks with the regulator were speeding up. At the same time, Diem will also have functions to be applied in each case and phase in different fields based on the law, to avoid being exploited in money laundering situations.

“Once we pass the review, we will start testing with a small number of users,” Christian said. The purpose of the testing phase is to ensure that the storage technology and system are working as expected. However, information about Diem’s ​​test partner is not disclosed in the near future.

With support from Facebook, an important advantage of Diem is the “network effect” brought by the social networking giant. Besides, there is the support of cross-border e-commerce giant Shopify (Canada) as well as media platform Spotify and a series of other large companies like Uber …

“Cryptocurrencies powered by companies like Facebook will be easier to distribute and quickly become more popular. We will specifically assess users’ concerns during the testing process for the most relevant changes, “Michael Casey said.

In fact, Diem isn’t quite the new digital currency. This currency was previously known as GlobalCoin or Facebook Coin and most recently the Libra was revealed in mid-2019.

Facebook previously established the Libra Association to oversee the currency, consisting of 28 original members, including Mastercard and Uber, and secured by financial assets including Treasury securities in an effort avoid fluctuations. According to Facebook, the coin will be transferred to a public blockchain regime using a proof-of-stake algorithm within 5 years.

Facebook’s previous project has faced criticism and opposition from central banks. The first version is expected to be released in 2020. However, during a meeting with Senate Democratic leaders on September 18, 2019, Facebook CEO Mark Zuckerberg told the founders. legal that the Libra will not be released anywhere in the world without prior approval from US regulators.

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