Facebook (FB) To Launch a Pilot Diem Cryptocurrency Project Later in 2021: Report

April 20, 2021 6:26 AM EDT

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Facebook (NASDAQ: FB) is aiming to launch its much-contested cryptocurrency project Diem this year, CNBC reports. Plans are in place to launch a pilot with a stable coin pegged to the U.S. dollar, the report adds.

The launch is expected to take place later this year in a limited form to allow Facebook to test the waters, CNBC is citing a person familiar with the matter. The social media giant was forced to cancel initial plans after a huge backlash it faced from regulators and lawmakers.

“It’s really drifted off the radar in a way that’s quite striking. It was such a stunning challenge to the international order, in that the backlash was just really powerful,” Casey said.” Michael Casey, the chief content officer of CoinDesk, said.

Industry experts believe that Facebook used the recent months to rethink its project and adjust it to become more acceptable for regulators. Christian Catalini, Diem’s chief economist, told CNBC last month that the regulators wanted to see a phased approach to launch.

“We are going to be phasing in different functionalities and use cases, applications in different areas. Once we get the green light, we will start experimenting with a small number of users and a small number of players,” he said while adding that members of the project will have to pass anti-money laundering (AML) probes.

Diem “changed dramatically over the past year and a half from a naive blockchain to a very sophisticated blockchain that you can see is trying to answer some of the questions that regulators had,” said Ran Goldi, CEO of Digital Assets Group.

CNBC report adds that the Diem pilot project will start in a limited capacity with a main focus placed on transactions between individual consumers. The project is still not undecided on whether to allow an option for users to buy goods.

Michael Gronager, CEO of blockchain analysis firm Chainalysis, says he expects FB to launch Diem this year. If not, that would be a “missed opportunity.”

“At the same time, it’s one of multiple initiatives happening and it’s similar to Tesla buying $1.5 billion in crypto. This is just part of a big movement, not a new movement.”

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