The never-ending story, Libra digital currency, or with its new name Diem, is still preparing for an early launch in January 2021 and trying to get regulatory approvals. Around its mission “building a safe, secure and compliant payment system that empowers people and businesses around the world and providing organizational independence” the project mainly aims threatening the traditional government-run financial systems and had already many conversions and widespread pushbacks. The owner of the phenomenal project is run by the Libra Association is now called as Diem Association as well.
Facebook initially pitched Libra as, essentially, a mainstream cryptocurrency that could be spent online or offline, much like the dollar, and meant to be a single coin pegged to multiple currencies with tradable abilities. The project aims to make digitally transferring money quicker and easier by offering related financial services directly to customers. Facebook also announced its preparation for a digital wallet, called Calibra, for turning its investment in the project into a potential moneymaker. The wallet application has since been renamed Novi. It was later changed to offer multiple coins that would each be backed by a different currency. Those coins will be positioned as “a complement to, not a replacement for, domestic currencies”.
The initial version of the project was wanted to launch almost two years ago and designed mostly like BitCoin. The payment systems Visa and Mastercard were within the development team. However after the loudly concerns from some European financial institutions, especially from European Central Bank, they withdrew from the project and it converted from launching a currency to launching a payment system like Pay-Pal. The answer of Pay-Pal for the new competitor was integrating cryptocurrencies into its payment scheme.
The brand new Diem network was designed completely on blockchain and coins will be backed by a reserve of assets made up of cash or cash equivalents and very short-term government securities. The Diem Association sees there is still a demand for modernizing financial infrastructure and regulatory frameworks to meet changing consumer demands and keep pace with global innovation in digital payments. However, any differences from existing payment systems like Pay-Pal did not announce yet. The Association has committed that it will proceed only upon receiving regulatory approval, including a payment systems license for the operating subsidiary of the Association from FINMA (the regulatory body of Switzerland). The licensing process is ongoing and the operational subsidiary of the Association is in active and productive dialogue within. Why Switzerland? Because the Country has the most powerful decentralized financial regulatory body in Europe and the priorities of the financial system perfectly match with the Diem Association.
Even if the Diem will be launched next month, we are still waiting for crucial amendments to the original business plan. Wait and see! We will touch on more points about disruptive players in crypto asset markets in the following articles. For any further questions, please reach us via email@example.com or visit our CryptoIndexSeriesTM Platform for better analysis of the crypto market space.
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