Diem, the digital currency payment project of Facebook, has not taken off in its struggle over financial regulators. According to a report by the Washington Post on Friday, the payment project has been facing several difficulties while trying to turn the tide over regulatory wrinkles with senior legislators under the Biden administration. Even with the full might of the lobbying power of the social media platform in the capital, the digital currency project hasn’t been able to hit the ground running.
Diem Is Slowly Running Out Of Steam
There have been reports about David Marcus, the head of Facebook Financial, who met with several financial regulators back in September. According to sources, Marcus had argued for the vitality of crypto in broadening the access to financial products- all the while implying the benefits that Novi, the payment app of Diem, provides.
The representatives of the currency project stated that the regulators were pleased with several of the design changes that they incorporated into the project. In fact, the currency project has gone through quite a lot of changes since its initiation back in 2019.
Diem was initially christened Libra, and the endeavor of Facebook was initially thought of as a global payment system that brought forth a Facebook Coin which was backed by a bunch of fiat currencies. In the paradigm of this cryptocurrency project, the idea was to launch flat-pegged individual digital currencies which would start with a stable coin of the USD.
For Diem and several other stable coin projects, the very concern over the growing power of cryptocurrencies within the framework of money market funds outside of an institutionalized banking system could definitely bring forth significant problems of regulation. At the same time, major stakeholders in legacy finance have continued to push for an accelerated digital currency of the central bank- called CBDC.