Facebook Novi is here but where is Diem?
Facebook announced the launch of the Novi wallet yesterday on a pilot basis with Coinbase serving as the custodian for the same but instead of using its own Diem crypto, the company has chosen to use USDP for the pilot.
Users would be able to purchase USDP which would get deposited into their Novi wallets and then they would be able to send USDP to other users within or outside the country making the process faster and more reliable as well as cheaper. But this raises the question as to what has happened to the cryptocurrency project of Facebook called Diem. This project has suffered many ups and downs over the last couple of years since the announcement of its launch in 2019. At the time of its announcement, the crypto industry was not as big or as close to mainstream usage as it is now but even at that time, the regulators were shocked into action as they realized how big Facebook was in different countries and what kind of consequences would be there if the company was allowed to use its cryptocurrency.
The regulators in many countries felt that the company would run a parallel economy especially in smaller countries, purely using the strength of its userbase and this was not something that they were comfortable with. So, they forced Facebook to go slow on its crypto project, which by then had been renamed to Diem, and this project is yet to see the light of day.
“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live. We care about interoperability and we want to do it right,” Novi project lead David Marcus said on Twitter.
This was a clear indication that Diem is still in the works but as Facebook is already deep in trouble with regulatory and privacy issues, it would not want to stir up the hornet’s nest at this time. There is also a thought that Facebook might build a separate platform for the metaverse, which is fast gaining traction around the world, and Diem may become the primary currency in the metaverse. This might help it to avoid regulatory checks with it launching its world and use the currency within its virtual world. That might be another thought that the company might be pushing for at the moment but for now, the Diem project seems to be in the backburner due to the regulatory issues and unless and until that is sorted out, it may not see the light of day.