One of the most controversial cryptocurrency projects Libra appeared in a new line of roles called Diem earlier this month. Diem means “day” in Latin and represents coins stability and independence. Facebook has already announced the launch of its cryptocurrency.
Diem is a stablecoin similar to Tether and alike price-pegged cryptocurrencies. It exists on Diem’s own project’s blockchain and is stored in the wallet called Novi. Diem will be used for payments and in addition to that it will be programmable, a lot like Etherium, that will allow developers to design custom applications.
Originally Libra was meant to be launched as a stablecoin backed by a number of assets. The stable coin would be more stable than other cryptocurrencies and will be globally used as a means of exchange. There were a number of influential financial firms who were ready to back up the coin, among these firms are Visa, MasterCard, and PayPal. However, these companies left the project earlier than it was fully launched, as Libra received bad press in addition to regulatory uncertainty.
What happened earlier this month is more than just a renaming of the Libra blockchain. The developers responsible for the project thought it was best to change plans in order to accelerate the regulatory approval process. The main change that happened when Libra became Diem is that Facebook was reduced from the equation. Lawmakers prefer organizational independence from Facebook so the product can have a chance of winning regulatory approval. Among other changes there was a fundamental shift in the general goal of the project. In the beginning Libra was meant to be an alternative to the current economic system and challenged the global fiat market. However, now Diem no longer confronts it, as its purpose is no longer to replace currencies like USD, but to compliment them.
Diem will launch as a one dollar pegged stablecoin. The launch is scheduled for 2021, if regulatory approval is reached in time. When it happens developers plan to create more single currency stable coins, by the time regulators give permission to proceed a multi-currency stable coin will appear. The appearance of Diem will result in advantages for both the market and individual users, as there is a benefit of immediate adoption. There will be a new era in cryptocurrency usage. Facebook has a multibillion audience who will become cryptocurrency users. The result of such a fast rollout should prompt education of masses about the advantages of blockchain technology. The vast network of users will also attract new developers to the project. Dapp engineers could work with Diem to develop new fintech applications that will provide access to a big number of potential users.
With Diem consumers and companies will be able to conduct fast, inexpensive, and secure transactions by using this network. Facebook users will send funds internationally almost instantaneously. Diem will use a custom-built blockchain that is created to serve billions of users. This blockchain works as the technical ground for the coin and the means for verifying ownership and transactions.
Another aspect is the Novi wallet. This digital wallet was meant to be released this summer, but developers delayed it in order to make alterations to its capabilities and design. The initial version of the wallet was meant to store Libra coins only, but the newer rendition does much more. With the new version of the wallet, users will be able to store various currencies, as it supports major crypto and fiat currencies.
Diem has the potential to change the world of crypto and international financial markets simultaneously. Due to these reasons, Diem will fight for the right for its existence until its launch date.