The digital asset, the cryptocurrency which started with Bitcoin has seen a lot of other coins enter the market and despite the regulations and tax issues plaguing that market more cryptocurrencies continue to emerge.
Facebook in 2019 announced its intention to launch its cryptocurrency, Diem. Since the announcement, a lot of controversy and anticipation have been trailing it.
Facebook in its announcement stated that Diem, formerly called Libra, will be traded and used to make payments for services on its platforms. A wallet system, Novi, was also developed for the cryptocurrency.
This Diem was initially intended to join the league of special coins that are privileged to be backed by fiat currencies making Diem a stable coin.
A stable coin is a cryptocurrency that has an approved link to conventional assets such as a fiat currency. This makes it more stable and not volatile like most cryptocurrencies.
Now, instead of the intended backing from various fiat currencies, only the US dollar will be backing Diem.
The Diem USD stable coin would be issued and managed by Silvergate Bank that has its location in California.
Also read, Can Facebook Libra Project be Trusted to Run a Banking System?
About that development, the Facebook cryptocurrency project now intends to make the United State the location for its head of operations instead of Switzerland where it was originally situated.
The cryptocurrency will also be registered with the U.S Department of the Treasury to enable its use as a money service business and a legal tender in the country and beyond.
Facebook incorporation formed an association for the Diem project, high-ranking individuals, organizations, and corporations were part of the association.
However, over time some high-profile members of that association have exited the group.
Their exit from the association has raised eyebrows and the data privacy controversy with Cambridge Analytica on Facebook’s privacy rights infringement is also one of the factors that have garnered the generally hostile attitude to the Facebook cryptocurrency.
There were claims that Facebook cryptocurrency Diem was set up to enable Facebook to have the financial information of its users to enable them to improve the accuracy rate of the ad’s target audience.
Although Mark Zuckerberg admitted that having cryptocurrency used would likely increase advertising he firmly stated that the aim for Diem was to make it easier for people to transfer funds as one will transfer photos.
Also, Facebook incorporation intends for Diem to be open-sourced and not controlled by the organization despite claims that Facebook wants sovereignty of Diem.
The Diem would be run on a blockchain technology where everyone will have access to the information as they are stored. In a blockchain, information entered is irreversible and hence cannot be tampered with.
Facebook’s cryptocurrency project continues amidst the speculations and controversy, however, a new date for its launch is yet to be set.
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