Facebook’s Diem aims to launch digital currency pilot this year

The Diem Association to launch a pilot with a single stablecoin pegged to US dollar.

The Facebook-backed digital coin, Diem, is expected to launch a pilot later this year, according to a person familiar with the matter.

The Diem Association, the Switzerland-based nonprofit which oversees diem’s development, is aiming to launch a pilot with a single stablecoin pegged to the US dollar.

The source, who wants to remain anonymous, said this pilot will be small in scale, focusing largely on transactions between individual consumers. There may also be an option for users to buy goods and purchases. 

There is no confirmed date for the launch and timing could change.

Previous incarnation

Diem, which was previously called Libra, is an independent group organised by Facebook to manage digital currencies. But, the Diem Association has lost numerous members and executives almost two years on since its launch.

Visa, Mastercard and Stripe were some of the first companies to withdraw from the association. That was followed by other members, including PayPal, eBay and Vodafone. 

Meanwhile, the project has also seen several departures, from Kevin Weil, the head of Facebook’s planned digital wallet Novi, to Dante Disparte, Diem’s public affairs chief. However, it has also ramped up its leadership team with big hires such as CEO Stuart Levey, who was formerly HSBC’s chief legal officer.

Wider concerns

Diem was met with intense scrutiny when it was first introduced. Given Facebook’s wide reach, central bankers and politicians feared the currency could threaten monetary stability and potentially allow money laundering

Facebook’s involvement also meant that there were concerns over how it would protect users’ privacy.

The Diem Association is now in talks with Swiss financial regulators to secure a payment licence, which could be a crucial step towards starting its digital currency project.

 

READ MORE: Facebook to buy renewable energy from wind-power project in India

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