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Facebook’s Blockchain Platform Could Be a Step Stone to Success
While it may not be possible to make money with Facebook’s obscenely large database of uzytkownikow, a proposed system of platnosci based on blockchain may be a stepping stone to success. With an average of 2.7 million uzytkownikow monthly, Libra could have a big impact on the social networking website’s future. As a platform aimed at financial services for non-possessors, Libra is designed to be a successful platform.
Diem is a stablecoin project
The founders of the Facebook-owned stablecoin Diem are considering ways to sell off their intellectual property. The project has faced a number of challenges, including regulatory scrutiny and executive departures. Its current team includes representatives from Facebook, venture capital firms, and aid organizations. It is unclear whether it will proceed with this sale or not, but if the project is shut down, it would be a major setback for Facebook’s cryptocurrency ambitions.
While the Diem project was backed by several investors, it ultimately fell through regulatory hurdles. Initially, it was intended to be attached to a variety of assets around the world. However, later, the project changed its course to be pegged to the dollar. While the founders had many hopes for the project, regulators are wary of giving the social media giant too much control. Diem’s future now depends on the way it is regulated.
It’s not Facebook
The Libra Association is a paper-thin misdirection. While the name “Libra” evokes a sense of decentralization, the association was set up by Facebook to invite its members, most of whom had ties to the company. Harvard tech scholar Primavera De Filippi has said the association was only a charade intended to reassure U.S. lawmakers that the platform was not in control.
In early June, Facebook announced plans to launch a cryptocurrency called the “Libra.” The libra is backed by a basket of fiat currencies. Its creation was met with opposition from governments. The company decided to backtrack, citing concerns about its ability to protect user data. The Libra project was halted by regulators following an outcry over the disclosure of personal information about users.
It’s not a money-transfer pilot
The Diem Association rebranded as “Diem” and partnered with the firm that developed the popular stablecoin Novi, but that move was controversial, leading to withdrawals from the association. Other members include eBay, Vodafone, and Stripe. Diem recently rebranded from Libra, and has hired Stuart Levey, a former HSBC chief legal officer.
The new administration has given the project a name, too. It will now be governed by the Diem Association, a nonprofit comprised of various sectors of the economy. The group will now focus on the development of the project. Diem will launch as a pilot in 2021, with a single stablecoin pegged to the U.S. dollar.
The social media giant has been teasing its new digital wallet, called “Novi,” for two years. The company is now testing a small beta version of the project in the United States and Guatemala, aiming to help families send remittances across borders. While Novi is just one step, the firm is also developing its own cryptocurrency, called “Diem,” and is still awaiting regulatory approval.
It’s not a blockchain
The recent news that Facebook is working on a cryptocurrency is not surprising, but there are some questions about its future. Has the social media giant finally decided to move into the blockchain space? What would be the regulatory impact? Would this cryptocurrency threaten the stability of the financial system? Would it be more like bitcoin or a stablecoin? If so, will this cryptocurrency affect the price of traditional assets?
The answer may lie in the technology behind the new currency. While Bitcoin and ethereum have made huge strides in the past few years, it’s still early days. Facebook’s blockchain platform is not yet fully ready. However, some major players have jumped into the fray. Diem, for example, will use blockchain technology to streamline the payment process. The company has teamed up with the U.S. Treasury Department to help develop the platform.
