Facebook’s Diem and other cryptos under fire from BIS GM

Karthik Subramanian

The General Manager of BIS, Agustin Carstens, has warned that private cryptocurrencies like Facebook Diem and others can concentrate a lot of the market power into the hands of a few private players putting the financial ecosystem at risk.

This has been the general tone used by many large regulators nowadays when dealing with the idea of cryptos and stablecoins over the last couple of months. While they are clear that they cannot stop the growing popularity of cryptos and have come around to the idea that they need to co-exist within the financial ecosystem, the fact that they have no control over the private cryptos has been gone down well with the regulators and rightly so as well. So, they are looking to regulate the private cryptos and trying to ensure that they do not get out of hand.

Facebook has been in the news for the whistleblower allegations and the outage that it suffered for a few hours and it is clear that regulators and authorities feel the need to ensure that Facebook does not become too big to control. Already, its reach extends far beyond the borders of the US and it has been affecting the way the world works and all this must be monitored closely. The increasing power of Facebook has rattled the authorities as they believe that it would acquire even more power and control when it is allowed to issue its crypto token as it can then easily take it to the masses with not much responsibility for its actual usage.

Agustin also pointed out the risk of bringing in a fragmented payment system that the cryptos would foster and that could pose a big threat to the goodwill that traditional payment systems have built up over the years. Once Facebook brings in Diem and makes it a currency that is inter-operable within its network, that would be akin to a separate financial ecosystem by itself which would pose a threat to the real-world ecosystem and increase the complexity of how they inter-operate.

“In this type of scenario, stablecoins could erode a jurisdiction’s monetary sovereignty and its unit of account through ‘Diem-isation’,” said Carstens.

To offset some of these risks, the central banks are in a race to bring out a digital version of their fiat currencies so that they can bring in a sense of competition to the cryptos and push users to opt for the regulated CBDCs when given a choice.

Read this next

Technical Analysis

FTSE 100 Technical Analysis Report 16 April, 2024

FTSE 100 index can be expected to fall further toward the next support level 7760.00, former strong resistance from last year, acting as the support after it was broken this January.

Digital Assets

Cyprus keeps FTX EU license suspended until September

The Cyprus Securities and Exchange Commission (CySEC) has extended the suspension of FTX.com’s CIF license, which allowed the insolvent platform to operate throughout Europe, until September 30, 2024.

Metaverse Gaming NFT

Mon Protocol and Pixelverse Forge a Groundbreaking Partnership to Revolutionize Blockchain Gaming

Mon Protocol and Pixelverse make history in the annals of Blockchain gaming as they set up the architecture for the melding of their technologies.


Nimiq Pay Launch: A New Standard For Self-Custodial Crypto Payments

Nimiq, the blockchain ecosystem for payments that is designed to make cryptocurrency easy for everyone to use, has taken the first concrete steps towards its goal of becoming the world’s most widely-accepted digital asset for payments with the launch of Nimiq Pay.

Inside View, Interviews

Exclusive: GoMining’s Mark Zalan wants to democratize opportunities of Bitcoin halving

As the Bitcoin community counts down to the upcoming Bitcoin halving, Mark Zalan, CEO of GoMining, shared exclusive insights into how the company is gearing up for this pivotal event in the cryptocurrency world.

Digital Assets

Umoja Partners with Merlin Chain to Launch Revolutionary Bitcoin-Based Synthetic Dollar – USDb

Umoja, an innovative smart money protocol, has embarked on a strategic partnership with Merlin Chain, a leading Bitcoin Layer-2 network, to introduce USDb, the first Bitcoin-based, high-yield synthetic dollar.

Crypto Insider

Bybit Report Highlights Imminent Bitcoin Supply Shortage and Rising Scarcity Post-Halving

Bybit, recognized as one of the top three cryptocurrency exchanges globally in terms of trading volume, has recently published a comprehensive report highlighting the future supply constraints of Bitcoin.


BlockDAG Outshines XRP Price Breakout and Uniswap Crypto Forecast with 20,000x ROI Potential and Teaser for Keynote on Moon

BlockDAG has become the latest sensation in the crypto world, which has taken the spotlight by storm, overshadowing even the most optimistic projections for XRP’s price breakout and Uniswap’s crypto forecast.

Digital Assets

Binance announces blockchain courses at European universities

“Education plays a pivotal role in advancing adoption and fostering opportunities as these technologies redefine our future and global economic landscape.”