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Highlights
- Diem is a blockchain-backed digital currency being developed by Facebook through Diem Association.
- Earlier known as Libra, Facebook rebranded Diem in 2020.
- Facebook intends to launch Diem by the end of this year
Facebook has been in thick of things of late. The recent outage of its social media applications on Monday evening didn’t go very well with its plan to launch its ambitious Diem cryptocurrency project. While Facebook termed it a configuration issue due to the change in the backbone routers, which manages the network traffic between the company’s data centres, experts have raised issues related to security aspect.
What is Diem?
It’s been sometime that Facebook has made its intention clear to enter the cryptocurrency space. Diem is Facebook-backed ambitious digital currency project, which aims to revolutionize the current payment system.
Diem is a blockchain-backed digital currency being developed by Facebook through a Diem Association. With the Diem project, Facebook aims to launch it by this year. With the growing impetus on the launch of CBDC (central bank digital currencies), Diem could well turn be leader of the pack.
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It won’t be wrong to say that through this digital currency, the social media giant aims to lead the charge and become world's prominent digital bank.
Just recently, it had announced the launch of Novi Wallet. Novi Wallet, which is a Diem-backed payment system, enables the users to move money domestically and internationally in a quick and affordable way.
Intense scrutiny already
Even though Diem is yet to be launched, but it has already met with intense scrutiny. Earlier known as Libra, Facebook had to rebrand it as Diem in 2020. Many believe that given Facebook’s wide reach, the currency could threaten financial stability and potentially enable money laundering. Facebook’s involvement also meant that there were concerns over how it would protect users’ privacy as well.
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Opportunity for investors?
Investors do have a fair chance to invest in a dynamic digital payment system that could well rule the system going forward. Assuming it doesn’t run into other regulatory troubles, the Facebook-backed Diem could well turn out to be a real gem in the crypto space.
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The stable coin aims to tackle the issues related to digital payments infrastructure along with issues of high transaction fees, slow cross-border payments etc. As Facebook leverages the current system, Facebook’s Diem and its scalability will provide investors a unique solution to offer easy solutions to complex problems. As the Diem Association is made up of 26 companies, Facebook can expand the potential of the Diem beyond its own platform.
Facebook’s Diem could well be a game changer in the digital payment industry, and it would be hoping that regulators and the internal issues will be in order by the time of the launch.
