Facebook’s Long-Stalled Digital Currency Could be Tested This Year: Report


Facebook CEO Mark Zuckerberg testifies before the 
House Financial Services Committee on Capitol Hill in Washington on Oct. 23, 2019.

Facebook CEO Mark Zuckerberg testifies before the House Financial Services Committee on Capitol Hill in Washington on Oct. 23, 2019.
Photo: Susan Walsh (AP)

Facebook hopes to launch a trial of its long-stalled digital currency project by the end of this year, according to a new report from CNBC. The currency, first announced in 2019 as Libra and then renamed Diem after some bad publicity, will now be pegged to the U.S. dollar, provided the tech giant can actually get it off the ground this time.

Facebook first announced plans for the digital currency in June of 2019 and was hit with immediate backlash from governments and consumer groups around the world that worried what would happen if a huge tech monopoly like Facebook competed with the worlds largest currencies. Facebook has roughly 2.8 billion active users on a planet of 7.9 billion people.

Facebooks plan in 2019 was to launch the blockchain currency by early 2020, something that obviously didnt happen after the tech companys partner organizations like PayPal and eBay started to pull out after the wave of negative press.

But CNBC, and whoever leaked this Facebook news to the financial outlet, seem to hint that Facebook is taking a much more cautious approach this time, even if details are still extremely scarce.

From CNBC:

The Diem Association, the Switzerland-based nonprofit which oversees diems development, is aiming to launch a pilot with a single stablecoin pegged to the U.S. dollar in 2021, according to a person familiar with the matter.

The person, who preferred to remain anonymous as the details havent yet been made public, 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, the person added. However, there is no confirmed date for the launch and timing could therefore change.

What the hell is the Diem Association? It appears to be the next iteration of the Calibra Association, the supposedly independent organization set up by Facebook to oversee the currency back when it was called Libra.

When reached for comment about the CNBC story, Facebooks Head of Communications for Australia, Antonia Sanda told Gizmodo by email, looks like this could be a leak as there are no official announcements from the Diem site, but Ill leave that for the Diem team to confirm.

Sanda provided Diems email address and wrote, We now send all media queries direct to the Diem organisation, as it is separate from FB […] if youd like to contact their team direct. Gizmodo has not yet heard back from Diem but will update this post if we do.

Governments around the world are setting up committees and task forces to examine the pros and cons of creating their own digital currencies, with China, Japan, and the UK announcing their own explorations in recent months. And its no secret that cryptocurrencies like bitcoin and ether have gained traction in recent years, with large companies like PayPal starting to get in on the action. PayPal announced last month it was launching a way for consumers to pay using cryptocurrencies at millions of retailers, handing the merchant fiat during the transaction.

But will Facebooks digital currency flourish after already experiencing one very embarrassing false start? Only time will tell. But you can bet that government regulators will be keeping a close eye on Facebooks plans for the future of money, especially since most world leaders think CEO Mark Zuckerberg already has too much power.

Congressman Brad Sherman even told Zuck in a July 2019 hearing that his new digital currencywhich Sherman mockingly called Zuck Buckscould cause the next 9/11, apparently referring to the possibility that criminals would use Facebooks new currency for illegal activities. And when thats your starting point of conversation with politicians who could help decide the fate of your new business idea, its tough to see it getting very far.



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