The cryptocurrency proposed by social media giant Facebook is gearing up to launch using a “phased approach,” its co-creator explains. The Diem Association, which oversees the crypto’s development, has been in talks with regulators to obtain a license.
Diem Updates Launch Plan
The Facebook-backed cryptocurrency “diem,” formerly called libra, is taking a “phased approach” to launch, co-creator and chief economist of Diem, Christian Catalini, told CNBC in an interview published on Tuesday.
The Switzerland-based nonprofit Diem Association, which oversees diem’s development, aims to launch a pilot with a single stablecoin pegged to the U.S. dollar this year, the news outlet reported, citing a person familiar with the matter.
This pilot will be small in scale and will largely focus on transactions between individual consumers, the person explained, adding that there may also be an option for users to buy goods and pay for purchases.
The Facebook-proposed cryptocurrency project has faced strong opposition from various regulators worldwide since it was first announced by the social media giant in June 2019.
The cryptocurrency was initially intended to be a universal currency tied to a basket of sovereign currencies, such as the U.S. dollar and the euro. However, after much scrutiny from regulators, the group revised its plan. It now aims to launch multiple stablecoins backed by different government-backed currencies, as well as one multi-currency coin.
Diem is now in talks with Swiss financial regulators to obtain a payment license. Catalini told the news outlet:
A big step of our dialogue with regulators has been a phased approach to launch. We are going to be phasing in different functionalities and use cases, applications in different areas.
He further described that all members will have to undergo extensive know-your-customer (KYC) checks. “Once we get the green light [from the regulators], we will start experimenting with a small number of users and a small number of players,” he clarified.
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Author: Kevin Helms