Facebook decides to launch its own new cryptocurrency Diem with Diem Association in 2021.
The term ‘cryptocurrency’ is creating huge waves in the business world especially after the emergence of the COVID-19 pandemic. The worldwide spread of viruses and Artificial Intelligence created digital transformation, which increased the use of eCommerce transactions among consumers and business leaders. Bitcoin, Dogecoin, and Ethereum are dominating the cryptocurrency market over the other digital currencies. The Silicon Valley giant, Facebook, plans to launch its first-ever digital currency project, Diem in 2021. The project was formerly known as Libra in 2019 but recently the name is changed to Diem, a Latin word meaning ‘a day’ with fresh changes. The main aim of Facebook cryptocurrency is to revolutionize the fintech from 2021 after overcoming strong opposition from the regulators.
The Diem Association is the digital currency project group of Facebook, which aims to launch the Diem as the single U.S. dollar stablecoin with 26 corporate firms and non-profit organizations. One of the firms is a minority investor known as Novi, the digital wallet of Facebook. The primary payment system license was applied with the Swiss financial regulator but it recently relocated to the United States regulator. The Diem Association will introduce a sophisticated blockchain digital payment system that will permit real-time eCommerce transactions with Diem stablecoins. The whole eCommerce transaction will be registered as a money-serving business in the books of the U.S. Department of the Treasury’s Financial Crimes Enforcement Network. The single U.S. dollar-backed Diem will be issued and managed by the Silvergate Bank in California.
Why is Facebook interested in investing in cryptocurrency?
The Silicon Valley giant is a professional in the social networking of billions of users across the world. Facebook already owns a digital currency project known as Credits to make smooth payments for Facebook games. It has its sincere interest in the market of cryptocurrency when the CEO, Mark Zuckerberg, mentioned that users will transfer money just like they send their photos to the party. The revised digital currency project, Diem, is specially designed for users to transfer money at a cheaper fee easily which provides an opportunity to attract more potential users to the social networking site. There is also a new subsidiary of Facebook that is a digital wallet, Novi, providing affordable access to certain financial services. Facebook will be one of the 26 investors with the same roles and responsibilities as the other investors such as Shopify, Spotify, Uber, Lyft, and so on.
Diem Association has a plan to launch two sets of the cryptocurrency coin— stablecoin with specific face value on Dollar or Euro and a multi-currency coin with multiple local stable coins for international payments. The Diem cryptocurrency will be backed by cash, cash equivalents, and government securities. This digital currency project is the only one having a wide user base in billions across the world with the presence of strong companies and other potential hi-tech companies.
Are you ready to trust this Facebook cryptocurrency after its launch in 2021? If this digital currency project is successful then Facebook and Diem will reshape the eCommerce transaction process into the lives of many people who are still in doubt about cryptocurrency. It is indeed an interesting issue to follow up on whether Diem will able to attract more regulators and investors to have a successful launch in 2021.
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