In 2019, Facebook wanted to revolutionize the world of Finance with a global digital currency. The project was called libra and the token would be linked to a group of currencies such as the dollar and the euro.
However, Libra would never get off the ground. The project was strongly opposed by financial regulators around the world. Ultimately, the project lost the support of major companies such as Visa, Mastercard, Spotify and Uber, and a slightly less ambitious version of the project was chosen.
Thus Libra turned into Diem. The plan was no longer to release a single universal coin, but rather multiple “stablecoins”. Each of these coins would be linked one-to-one to a traditional currency such as the dollar or the euro.
Diem is expected to launch in 2021 and the company that would be responsible for the rollout is The Diem Association.
The Diem Association wants to start working with Diem in phases by 2021. Christian Catalini, Diem’s chief economist, told CNBC’s Joumanna Bercetche last month: “We will be rolling out various functionalities, use cases and applications in phases”. He added this to pass extensive money laundering checks.
As soon as the green light is given, the technology is tested on a small scale to test that the relevant technologies and systems work as expected. Ultimately, the rollout of Diem will continue to be expanded and new partners and traders will be added to the project. Which partners and traders these are has so far not been made public under any circumstances.
Launch despite setbacks
The crypto project that once started as Libra has been the target of criticism from around the world since its inception. Yet this is the year that Diem will really be launched, says Michael Gronager, CEO of analysis company Chainalysis. He said it would be a missed opportunity if it were not, and the Diem project is similar to Tesla buying $ 1.5 billion in cryptocurrency. Gronager argues that Diem is only part of a much larger umbrella movement.
At the moment, Diem is finishing the finishing touches to complete the actual launch later this year and finally get the digital currency project off the ground.