Home
News
- Diem stable tokens project aims to allow users to transact without bank accounts
- The stablecoin will help Facebook’s platform to attract more users
- When 28 members of the project left, the association behind the USD-pegged currency faced the biggest challenge to prepare again and roll-out the tokens
- Novi e-wallet will be introduced alongside the stable crypto coin to play a significant role
Diem Association was known as Libra Association previously, which is making USD-pegged cryptocurrency for Facebook. The social media giant has recently revealed that soon it will be coming up with its latest Diem token.
After the issue of the Diem crypto coin, Silvergate Bank, based in California, will be managing the supply and reserve of the coin. After facing several hurdles and criticisms, the social media firm has signaled that it will press on with the project.
Why do the social media giants want Diem?
Diem was about to be introduced by the beginning of this year. According to a report published by The Financial Times, the Diem crypto coin would likely be backed by USD only. This means the social media firm does not want the stablecoin to be supported by significant currencies as multiple single-currency stable tokens.
Notably, the fiat currency-pegged coin is not actually the social media’s Diem. In contrast, Diem Association is only behind the project, which the popular social platform co-founded as Libra Association.
Hence, the Diem association will only serve as the monetary authority for the virtual asset, and Facebook’s team will have no direct control.
However, Facebook handle aims that the USD-pegged tokens will empower billions of individuals globally. Moreover, the project will help approximately 1.7 billion adult users without a bank account.
How will the stable crypto coin help Facebook?
The social media firm has a personal interest in digital currency ecosystem. About four years back, the social media firm had launched Credits for payments on games played on the platform. However, due to US regulations, the social media firm had to remove its monetary system.
According to Mark Zuckerberg, the Chief Executive Officer of the firm behind social media platform, online transactions should be made like sending images. The Diem stablecoin project is designed to achieve such goals of faster transactions at a low cost.
However, according to Zuckerberg, the project will ultimately help the platform attract more users. Indeed, by acknowledging cryptos, the firm will make adverts more desirable and expensive. Notably, social giant could possibly have other plans too with the project.
Challenges to launch USD-pegged cryptocurrency
Diem Association has faced several roadblocks in launching its Diem tokens (former Libra). The major hurdle faced by Diem Association was after its 28 members bolted due to conflicting interests. Such members include PayPal, Visa, Mastercard, eBay, Mercado Pago, and others.
The member count was about a quarter of the total members. The exit of such members remained a more significant loss as they had brought expertise in payments and transfer technology.
Although the conflicts caused a hitch to the project, it again jumped over with other members. Hence the firm behind Diem will now have equal votes and authority when it comes to decision making.
Indeed, now everything is prepared to roll out the USD-pegged digital asset which formerly was known as Libra.
With the cryptocurrency, a wallet will be introduced
With the planned crypto introduction, the association behind Diem will also bring Novi, a complementary e-wallet. Novi, known initially as Calibra, is believed to be integrated with commerce and game features.
The wallet will ultimately allow its users to move to Diem in a borderless, free, secure, and affordable way. Indeed, the wallet will play a more significant role in enabling individuals across the globe to access affordable financial services.
Is the stablecoin project Facebook’s ploy?
Several analysts across the cryptosphere are concerned, as the social media firm has always been entangled in privacy issues. Many deemed that the Diem project seemed a ploy of the social media firm to get financial data and target more advertisements.
According to the social media company, when the plans were unveiled, the wallet firm was designed to be regulated by authorities. The factor was called to help prevent money laundering issues. Moreover, the firm claimed that it would keep financial data separate from its social data.
