Facebook-backed Diem Association reportedly to launch stablecoin pilot in 2021

An anonymous source has told reporters that the first Diem pilot will focus on transactions between individual consumers.

Facebook-backed digital currency project Diem could launch its first stablecoin in 2021 as a small-scale pilot, according to an anonymous source. 

Cited in a CNBC report published on Tuesday, the source claimed that the Switzerland-based nonprofit The Diem Association is still intending to launch its pilot for a United States dollar-backed stablecoin later this year. 

Back in November 2020, the association had already announced its plans for a limited launch of a U.S.-dollar stablecoin in January, yet as the months have since passed, the currency is yet to see the light of day. 

Diem’s stablecoin is a significantly scaled-back and rebranded version of Facebook’s initial vision for a global digital currency, native to its platform, that would be tied to a basket of multiple fiat currencies. Aside from shedding the name Libra, commentators have pointed to the thoroughgoing changes to Diem’s evolving project in response to a striking pushback from global regulators and nation-states. 

Ran Goldi, CEO of First Digital Assets Group, told CNBC that Diem’s underlying technology has “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.” First Digital Assets Group is currently building infrastructure for merchants to facilitate Diem’s use as a means of payment.

Diem, meanwhile, continues to await regulatory approval and the granting of a payments license from the Swiss Financial Market Supervisory Organization. Commentators speaking to CNBC were optimistic, with Chainalysis CEO Michael Gronager saying:

“I think it [Diem] will get past the gates this year. It would be a missed opportunity if not.”