Media: Diem to launch pilot stablecoin by year-end

The Facebook-backed Diem project (formerly Libra) aims to launch in 2021 a pilot of a digital currency pegged to the US dollar. The CNBC reports, citing its own source.

According to the channel, testing will be modest in scale, focusing mainly on transactions between individual consumers. Users may gain the ability to pay for purchases with the stablecoin.

There is no confirmed launch date for the pilot, so timelines may change, the source said.

The not-for-profit Diem Association behind the project is currently negotiating with the Swiss financial regulator to obtain a payments licence to advance toward issuing the digital currency.

“A significant step in our dialogue with regulators has been a staged approach to the rollout. We intend to gradually roll out different features and use cases across various domains,” said Christian Catalini, Chief Economist of the Diem Association.

When Facebook first unveiled its digital currency Libra in 2019, it drew regulatory concerns worldwide. German and French authorities explicitly said they would block Libra’s development in the EU.

In April 2020, Libra Association presented an updated white paper in which it abandoned the original idea of launching a basket-backed stablecoin. The organisation laid out a plan to issue several “stablecoins” pegged to different fiat currencies.

However, the project team later said that it had not abandoned the idea of a multi-currency stablecoin.

In December, the project conducted rebranding, changing the name Libra Association to Diem Association.

Earlier, German finance minister Olaf Scholz stated that renaming Facebook’s digital currency is not enough to dispel regulators’ concerns.

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