Facebook plans to revolutionize the financial industry with a global digital currency. The digital currency, known as Diem, is expected to launch later this year.
Diem pilot
According to a person familiar with the matter, the Diem Association, a Swiss nonprofit that oversees The development of Diem, is preparing to launch a pilot of a digital currency pegged to the us dollar in 2021.
He said the pilot will be small in size and will focus on transactions between individual consumers. He also added that users may be given a choice of what to buy. However, no date has been set for the launch of the pilot, and the timing is subject to change.
Michael Casey, chief content officer and former financial journalist at blockchain media CoinDesk, told CNBC: "The way it's done is really compelling. ”
Ran Goldi, CEO of cryptocurrency firm Digital Assets Group, said Diem's technology "has changed dramatically in the last year and a half, from a simple blockchain to a very complex one, and you can see that it's trying to answer some of the questions from regulators." The company is building infrastructure to enable merchants to accept Diem as one of the payment methods.
Michael Gronager, CEO of blockchain analytics firm Chainalysis, said: "I think it will pass the review this year and if regulators don't do that, they're going to miss out on opportunities." ”
He added: "At the same time, this is one of several actions that are taking place, similar to Tesla spending $1.5 billion on crypto. This is just part of the whole megatrend, not a new one. ”
What's next?
Diem underwent a complete overhaul and strengthened its leadership team by hiring Stuart Levey, a former chief legal officer at HSBC, as CEO.
Diem is in talks with Swiss financial regulators to obtain a payment permit, a crucial step that will take the organization one step further on the road to launching a digital currency project.
Last month, Diem chief economist Christian Catalini told CNBC: "Our dialogue with regulators is phased. ”
"We will roll out different features and use cases in phases, as well as applications in different areas," he said. It also added that member states, large and small, must undergo strict anti-money laundering inspections.
Christian said: "Once we pass the review, we will start experimenting with a small number of users and participants. "The goal is to ensure that the technology and reserve system is operating as expected.
While starting with a limited pilot, the group plans to bring in merchants and other partners in the future. At the moment, they have not disclosed their partners.
Network effects
With Facebook's support, an important advantage of Diem is the "network effect" brought by the social media giant. And it's also backed by big companies like cross-border e-commerce giant Shopify, streaming giant Spotify and Uber.
Michael said: "Digital currencies backed by companies like Facebook get better distribution. You can put it in the app, or add it to a lot of other places, and that's powerful. ”
He added: "When it's rolled out, we'll see how it will work. The interest in crypto today is tentative, and it will make it easy for more people to get into the space. ”
(Canada and the United States Financial Special Article, plagiarism must be investigated)
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Author: Zhang Yunhan
Editor-in-charge: Jax