Facebook is refocusing its private currency project of the future, called “diem” (formerly Libra), on the United States and the dollar. It will be a crypto whose price is stable (a “stablecoin”) and which will be backed by the dollar. One dollar diem (“USD diem”) will be worth 1 dollar.
This refocused project is much easier and faster to carry out than its first versions. It originally had a global and plural vocation. This ambitious initiative aimed at its beginnings to create a single large composite currency, but backed by a basket of currencies (dollar, euro, yen, pound sterling …). Faced with the rebellion of governments and the complexity of such a project, Facebook had revised its ambitions downwards. He then considered launching several stable cryptos, each backed by a major currency (dollar, euro, pound sterling, etc.).
Credibility and stability
The Diem association, which brings together 26 companies responsible for this complex project (technology, finance, regulatory compliance) does not specify whether stable cryptos backed by other major currencies than the dollar have been abandoned for good.
Alongside the association, a bank specializing in cryptos, Silvergate Bank will carry out the project. The American bank will be the sole issuer of the “USD diems”. It is she who will ensure the management of reserves (short-term US government debt) that guarantee the value of the stable crypto and ensure that it is credible. Alan Lane, Managing Director of Silvergate, believes in the ability of stable dollar-backed cryptos to “transform existing payment systems.” “
The Diem association leaves Switzerland. It was his original base to shine around the world. It joins the United States, the homeland of the dollar. It is the stable crypto backed by the world’s first currency that has become the number 1 priority of the American group.
Public authorities are closely monitoring private initiatives to launch new 2.0 currencies. They believe that currencies fall within their sovereign prerogatives. Spurred on by private initiatives like that of Facebook, countries are accelerating their projects to create central bank digital currency.