Facebook should be given the “benefit of the doubt” by regulators in its ambitions to launch the cryptocurrency it backs and its digital wallet, the head of the company’s financial services arm said on Monday, CNBC informed.
David Marcus, the head of Facebook Financial, also known as F2, said he hopes both the cryptocurrency called Diem and the social networking firm’s wallet Novi will launch next year.
“I hope that we get to participate with … Novi and Diem and the big changes of 2021, pending regulatory approvals where we need to obtain them,” Marcus said at the Singapore FinTech Festival, addressing a question on the biggest changes for financial services in the year ahead.
Facebook’s cryptocurrency project has been a rollercoaster since it was announced last year, facing huge criticism from regulators, a scaling down of ambitions and a rebrand.
The cryptocurrency was initially called Libra and was designed to be managed by a non-profit consortium consisting of several companies called the Libra Association. Facebook had planned to launch a wallet called Calibra that would allow users to send this cryptocurrency to each other.
One Libra coin was initially supposed to be backed by a basket of currencies. But regulators raised a number of concerns from the impact Libra could have on financial stability to issues over data privacy and money laundering.
In April, the Libra Association scaled back plans and said it would offer stable coins backed by just one nation’s currency, rather than a single coin backed by several currencies.
And last week, the Libra Association changed its name to the Diem Association. Earlier this year, Facebook changed the name of its digital wallet Calibra to Novi.
Last month, the Financial Times reported that the cryptocurrency Diem is preparing to launch as early as January, citing three people familiar with the matter.
The Diem Association is currently waiting for approval from the Swiss Financial Market Supervisory Authority as the organization is based in Switzerland, the FT reported.
Though Diem is described as a cryptocurrency, it is not like bitcoin which is perhaps the most well-known digital coin. It has a central organization behind it, something that bitcoin doesn’t. It is also backed by fiat currency, again a point of difference with bitcoin.
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