By
Chimamanda U. Martha
April 12th, 2024
Currently, Diem Association is in talks with the Swiss financial regulators to secure a payment license.
After the successful rebranding from Libra Association to Diem Association, the Facebook Inc (NASDAQ: FB) backed payment system has announced plans to launch a single stablecoin pegged to the United States dollar sometime later in 2021. According to media outlet CNBC, a person familiar with the matter confirmed that the stablecoin will be a pilot project and on a small scale.
Initially, Facebook experienced notable resistance to the Libra project from global regulators due to its huge market dominance. Notably, the social media giant is said to report over 2 billion active users per month. Hereby making its payment system attract regulators’ attention.
Having rectified the identified section and developed a much more sophisticated payment system, Diem Association anticipates the regulators to approve it this time round. “I think it will get past the gates this year,” said Michael Gronager, CEO of blockchain analysis firm Chainalysis. “It would be a missed opportunity if not.”
Diem Association and Its Stablecoin
Diem Association previously lost backing from notable payment platforms including Visa, Mastercard, PayPal, and Vodafone. Besides, some of the projects leading people have backed away. However, Facebook is still determined to launch a stablecoin and venture into the cryptocurrency industry. Furthermore, there is a notable demand for digital assets, digital payments both from retail and institutional investors fueled by the Covid pandemic. Moreover, the cryptocurrency market has surpassed the $2 trillion market cap level, overhauling major financial institutions.
In a bid to redefine the Diem Association, the company has hired Stuart Levey as the Chief Executive Officer, who was formerly HSBC’s chief legal officer.
Currently, Diem Association is in talks with the Swiss financial regulators to secure a payment license. Should the firm secure a license from the Swiss regulators, it could entail a huge game changer for the entire project.
“Once we get the green light, we will start experimenting with a small number of users and a small number of players,” said Christian Catalini, Diem’s chief economist. “We are going to be phasing in different functionalities and use cases, applications in different areas,” he added.
Facebook and its vast social media coverage including Whatsapp and Instagram could revolutionize the entire financial ecosystem. Facebook through WhatsApp has rolled out a feature in India that allows users to send and receive digital assets. However, India is on verge of banning cryptocurrency trading and also holding.
Despite the fact that Diem Association is an independent platform, it is also backed by Andreessen Horowitz, Coinbase, Spotify, Lyft and Uber. Notably, the Diem stablecoin will enable people across the globe to send and receive money without the worry of crypto volatility.
