The tech giant hopes that this product will make it possible to send and get funds overseas in an instant, secure, and without any fees.
However, many U.S. politicians reacted immediately to the announcement.
Five Democratic senators sent a strongly worded note to the editor:
Facebook has made numerous conscious business decisions to continue taking actions that harm its users and the wider society. Facebook is unable to manage a digital currency or payment system. Its existing capabilities to manage risks and keep users safe have proven to be insufficient.Recent revelations about the practices of this social network have brought it back into the limelight. A whistleblower said that Instagram’s algorithms create division within society. Instagram also encourages teenage girls to develop eating disorders and poor body image.
The Long Term is Coming
Facebook first announced plans in 2019 to launch Libra cryptocurrency, and Calibra wallet. The announcement was quickly rejected by central banks and politicians around the globe, as there were concerns about financial instability.
It’s safe to say that the tech giant was surprised by the torrential criticism. As a result, it went back to the drawing board and later issued a revised version of its whitepaper.
Both its products underwent rebrandings later. Calibra and Libra were renamed Novi and Calibra became Diem.
There had been speculation that Facebook would quietly abandon the product. But this pilot proves that Facebook is fully on track.
Facebook’s 2.8billion users and Instagram’s sister platforms WhatsApp (with 1.4 billion and 2billion users respectively) have raised concerns about Diem’s ability to undermine sovereign currencies, such as the U.S. Dollar and the Euro.
The social network could also be a formidable competitor for digital currencies issued by central banks.