There is an increasing interest in blockchain technology. Bigger and more recognisable brands are joining it. Some are investing in cryptocurrencies as a financial asset, while others are creating their own ecosystems. One such brand is Facebook, which decided to create its own stablecoin.
The story of Libra and Calibra
No one needs an introduction to what Facebook is. The largest social media platform which is constantly expanding its business segments. At the same time, Facebook is a huge advertising platform. Countless micropayments are made every day on Facebook. For this reason, it only seemed a matter of time before this technology giant would decide to modernise its business by creating its own cryptocurrency.
In May 2019, the company Libra Networks was created. It was a subsidiary of Facebook, which a few months later changed to the Libra Association. This organisation, based in Geneva, Switzerland, worked to launch the Libra cryptocurrency. It was to be a stablecoin pegged at a 1:1 ratio to the US dollar. The Libra Association also began work on Calibra, an application that would be a wallet for Libra holders. Calibra was thus to be an integral part of WhatsApp and Messenger.
However, the project encountered considerable problems. Very soon, the US SEC started to look at Libra. There were more and more voices saying that Libra, through such a close connection with Facebook, could affect the social networking giant’s increasing collection of personal data and the exploitation thereof. The same has been said by representatives of the strongest European economies, as well as leading figures of the European Central Bank. In connection with the situation, representatives of Libra, and even Mark Zuckerberg himself, were forced to hold numerous explanatory hearings. However, there were too many doubts, as a result of which the SEC did not give Facebook the green light to introduce its own stablecoin.
Rebranding – Diem as a new beginning
The idea did not end there, however. In late 2020, significant changes were made. The Libra project changed its name to Diem. In turn, Libra Association became Diem Association. The rebranding was aimed at creating a new cryptocurrency with the same foundations, but already based on all necessary legal regulations. It is important to note here that the aim of Diem Association is to disassociate itself from Facebook, so as to give the emerging coin a new, better PR. At the time of writing this article, the Diem cryptocurrency has not yet seen the light of day. Its release is expected in the first half of 2021.
The future of Diem
The creation and launch of Diem could prove to be another watershed moment in the world of cryptocurrencies. Many people are speculating how the new cryptocurrency will be used. However, the activity and determination of Facebook’s representatives indicates an attempt to introduce the coin and therefore gain great power. This is undoubtedly an interesting case, which we will watch with interest.