Facebook’s ambitious crypto project, Diem, has not yet launched despite the company’s repeated attempts to convince financial regulators.
According to reported by the Washington Post, Diem is having a hard time working out the latest regulatory details with the Biden administration. Despite Facebook’s significant lobbying power in Washington, the project is struggling to obtain all necessary approvals.
The Washington Post article reveals that this month David Marcus, head of Facebook Financial (F2), attended a meeting with regulators in Washington. According to anonymous sources present at the meeting, Marcus would have supported the importance of cryptocurrencies in expanding access to financial products, highlighting the advantages offered by the Novi di Diem payment app.
Representatives of Diem quoted by the Washington Post say regulators are happy with some of the changes made by the project. Diem’s design has in fact evolved considerably since the original announcement, dating back to 2019.
Initially dubbed Libra, Facebook’s crypto initiative was designed to be a global payment system that included a single digital currency pegged to the value of a basket of fiat currencies.
Instead, Diem will offer digital currencies pegged to the value of individual fiat, starting with a linked stablecoin to the US dollar.
Related: The Diem Association will launch a pilot for its stablecoin in 2021
However, some key politicians, such as Treasury Secretary Janet Yellen and several members of Congress, remain strongly opposed to the idea of privately issued stablecoins. Senator Elizabeth Warren he even defined the entire cryptocurrency sector “the new ghost banks.“
For Diem and other private stablecoins, growing fears related to the potential existence of large monetary funds outside the traditional banking framework could lead to much stricter regulations in the future.
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