One word that the World is hearing most often after Coronvirus is “Cryptocurrency”. Whether it is Elon Musk or Mark Zuckerberg, everyone is trying to rule the Crypto market by launching new crypto coin or boosting the old ones. Just after Tesla announced banning Bitcoin, Facebook’s Diem Cryptocurrency project has taken the traders’ full attention. Formerly known as Facebook’s Libra Project, Diem Association (owned by Facebook) plans to launch a dollar stable coin to focus on the US money market, withdrawing its license application with the Swiss financial regulator.
Why Facebook’s Diem Cryptocurrency is launching as a Stablecoin? – Purpose & Effects on the Global Money Trade
Diem Network US is the subsidiary unit of Diem Association that will run a blockchain-based payment system (primarily based on the US market) to allow the real-time transfer of Diem Stablecoins. A stable coin is a cryptocurrency backed by stable assets.
In the case of Facebook’s Diem Cryptocurrency, the asset is the US dollar. The purpose of doing this is to ensure their prices from changing unevenly. The company wants to make this payment system reliable & secure for consumers and will register as a money services business with the US Department.
The Diem cryptocurrency as a stable coin will be launched under the partnership with Silvergate Bank (American Crypto Bank). Silvergate will reserve all the rights to issue and manage this Stablecoin reserve. According to experts, Facebook is trying to take the Global Currency system. The launch of Diem Stablecoin will help the social media giant expand beyond social networking into the money trade market.
Although the company has not announced the launch of the Diem Stable coin yet, it is expected to launch late this year, according to the financial experts.
Is this the first time Facebook is entering the Cryptocurrency market?
Facebook had unveiled its plans for Libra in 2019 to ensure digital payments on its platform by partnering with payment firms & credit card organizations. Facebook hoped that Libra would enable Global transactions between consumers and businesses, but before it could work, the plan was opposed by policymakers who were afraid of losing their control over the money system.
To make things more reliable and smooth, Facebook rebranded Libra as Diem in 2020 with bigger plans to enter the Global Money Market. Currently, the organization comprises 26 financial firms and non-profit organizations.
Before Libra, Facebook used to have “Credits”, the virtual currency used to make payments for the games inside it. It might be possible that Facebook might use the Diem coin the same way to build a Worldwide financial system.
Nothing can be said with the surety as of now, but it will be interesting to see how Mark Zuckerberg will smartly roll out the Diem stable coin to create a reliable global financial system amid the chaos created by Elon Musk’s recent announcement on Cryptocurrency.
We will keep updating this thread when the officials will confirm the launch date or any further plans. Till then, stay tuned with us for more technology and social media latest updates.