The Facebook-backed digital currency Diem is set to launch a pilot scheme later this year, marking what will be a significant milestone in the development of the digital currency.
Formerly known as Libra, the token is expected to be launched as part of a small test project in the coming month, during which time it will only be pegged to the value of the U.S. dollar.
Transactions are expected to be limited to individual-to-individual, with the pilot scheme set to be run initially on only a small scale, according to reports from sources close to the project.
The launch of Diem has been several years in the making, since Facebook first announced plans to explore digital currencies back in 2019. At the time, Facebook helped form a consortium of technology and payments companies with an interest in the project, which included payment giants such as Visa, Mastercard, Stripe and PayPal.
However, early efforts attracted the attention of regulators worldwide, many of which raised concerns about the potential impacts of a Facebook digital currency on global financial stability.
The backlash forced a scaling back of plans, as well as driving the rebrand from Libra to Diem, with the project now much less ambitious than was originally envisaged.
Despite the legal challenges, Diem officials have previously suggested the project is on track, still progressing at a fast pace towards an eventual rollout.
Diem Chief Economist Christian Catalini said the phased approach to launch was part of the agreed approach with regulators, on the way to a future wider launch.
“A big step of our dialogue with regulators has been 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.”
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