Christian Catalini, chief economist of the planned digital stablecoin Diem, said that his organisation would phase out the Diem as soon as a Federal Reserve issued central bank digital money (CBDC) came to being.
The Diem, previously the Libra, is an institution of 26 financial businesses that aims to roll out a stable coin later this season, that’ll be pegged to the dollar. It’s built on blockchain technology and aims to enable instant, open and cheap movement of money.
Its precursor, the Facebook endorsed Libra, ran into fierce opposition from policy makers, who feared that it would usurp control of the financial system, and awarded Facebook’s poor history in certain areas, put user’s privacy at risk.
Therefore, in order for regulatory approval, the job was rebranded and is no longer controlled by Facebook, but with a collection of businesses.
„Diem has dedicated to evaporating out, for example, Diem dollar, when there were such a thing as a digital dollar issued by the Fed,“
Said Christian Catalini,
„The public sector has a large comparative advantage in developing anything that has to do with stability, money, value preservation and macroprudential policy. We don’t wish to change this. In reality, we would like to build on and take advantage of that infrastructure to quicken use cases for customers both domestically and also globally.“
The Diem institution has targeted the regions of competition and privacy in order to make its digital stablecoin more suitable.
„It is a technology that’s innovating on the privacy landscape in regards to selective disclosure and what you can really do with it,“ And „Diem will be solitude by design, and we also want to encourage privacy as a dimension of competition onto the community .“
On the possibility of connecting Diem with DeFi, Catalini remarked:
„There is a lot of invention in that area,“ he said. „But at the same time, when you tag on DeFi along with a stablecoin, what you’re essentially doing is reintroducing leverage into a system that’s intended to be one-to-one endorsed. And that is something that we don’t need on the Diem ecosystem.“
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