The arrival of COVID-19 epidemic and Artificial Intelligence have accelerated the usage of eCommerce transactions, driving the digital transformation of the corporate sector. Despite its volatile nature, cryptocurrency has seen a shift in momentum and has become a popular among investors.
The burgeoning cryptocurrency market has enticed major corporations to establish their own digital currencies. Facebook is one such firm that has jumped on the cryptocurrency bandwagon (FB).
The libra token, first suggested in June 2019, was supposed to be a global currency linked to a basket of sovereign currencies such as the US dollar and the euro.
Diem, formerly known as LIBRA, will compete in the cryptocurrency market against Bitcoin, Dogecoin, and Ethereum. Diem is the new brand name for the product.
The Diem Association is a Facebook-led digital currency initiative that seeks to establish the Diem as a single US dollar stablecoin with the help of 26 corporate and non-profit organizations. One of the businesses is Novi, Facebook’s digital wallet, which is a minority investor.
The principal payment system license was originally sought for with the Swiss financial authority, however it was recently transferred to the US agency. Diem stablecoins will be able to be used in real-time eCommerce transactions thanks to the implementation of a sophisticated blockchain digital payment system by the Diem Association.
The whole eCommerce transaction will be recorded by the Financial Crimes Enforcement Network of the US Department of the Treasury as a money-serving firm. The Silvergate Bank in California will issue and administer the single US dollar-backed Diem.
Facebook’s founder, Mark Zuckerberg, claimed that people will share money in the same way they exchange party photographs. Diem, a redesigned digital currency, is specifically intended to allow users to quickly transfer money at a lower charge.
He thinks that making the social networking site easier to use would attract more potential users. Novi, a new Facebook subsidiary that functions as a digital wallet and provides inexpensive access to some financial services, is also available.
Diem will operate a payment system based on the blockchain. A blockchain database is a special kind of database.
The system varies from a traditional database in that it stores data in blocks that are then chained together, rather than in rows and columns.
Blockchain is utilized in a decentralized method for crypto money so that no single person or organization has power — rather, all users have control collectively. As a result, a security compromise is less likely.
Decentralized blockchains are immutable, meaning that the data recorded cannot be changed. Transactions in cryptocurrency are forever recorded and may be viewed by anybody.
Diem Stablecoins may be transferred in real time via this mechanism. The cryptocurrency will be registered as a money services firm with the Financial Crimes Enforcement Network of the US Department of Treasury, according to the organization.
Digital currencies that are linked to a fiat currency are known as stablecoins. Diem USD Stablecoin will be issued by Silvergate Bank, located in California. The Diem USD reserve will be managed by Silvergate. The Stablecoin will be piloted by Diem, according to the company.
A Stablecoin is a new type of cryptocurrency that aims to provide price stability by backing itself with a reserve asset. Stablecoins have gained popularity as they try to provide quick payment processing as well as security or anonymity. Stablecoin values are steady and devoid of fluctuation since they are fiat currencies.
Stablecoins are cryptocurrencies that try to tie their market value to anything outside of themselves. Stablecoins can be linked to a currency, such as the US dollar, or to the price of a commodity, such as gold.
They establish price stability by relying on collateral or using algorithmic processes to purchase and sell the reference asset or derivatives.
The first Libra project was intended to enable transactions between customers and companies all across the world, allowing more people to access financial services.
Are you willing to put your faith in this Facebook cryptocurrency once it launches in 2021? If this digital currency experiment succeeds, Facebook and Diem will change the eCommerce transaction process and bring cryptocurrency into the lives of many individuals who are still skeptical of it. It would be fascinating to see if Diem is able to recruit additional regulators and investors in order to have a successful launch in 2021.