The iPhone 15 Pro would finally have physical buttons, Apple
What is Diem formerly Libra? What you need to know about the currency backed by Facebook
This page was translated using AI and machine learning.
(Pocket-lint) – Diem – formerly Libra – is a new payment system that was initially scheduled to be rolled out in 2019/20. Corn as you’ll read below, there have been numerous issues with partner abandonment, including PayPal, Visa, and MasterCard, as well as regulatory challenges.
The regulatory challenges were serious and included a lot of reluctance from the US and the EU – you can read full details about it on Diem’s Wikipedia page if you want.
Libra has been replaced by Diem
After the problems, Libra rebranded themselves as Diem in late 2020, apparently to create a fresh start. The partners still present are Lyft, Spotify, Uber and Shopify.
The system wasn’t necessarily designed to replace current currency – rather, it is designed to bring digital payments to those who don’t currently have one and create a way to transact cheaper across borders.
Best VPN 2021: Top 10 VPN Deals in US & UK
By
·
The system is supported by Facebook, but the organization in charge is actually a non-profit, based in Switzerland with a simple logic of providing a global currency. He says “moving money around the world should be as easy and cheap as sending a text message.” The idea being that you can use any app to send payments.
In mid-2020, it emerged that Libra (as at the time) wanted to create a structure that housed different cryptocurrencies and had requested a license from the Swiss authorities.
And indeed, in 2021, the strategy behind Diem appears to have shifted towards supporting current currencies and simply ease of payments. Facebook’s Libra wallet – a digital wallet just like Apple’s or Google’s – now appears to be intended to support traditional currencies rather than just Libra / Diem.
Diem withdrew the Swiss request and asked US regulators for a license to operate in money services. So whatever happens, it looks like Diem will focus on the United States first.
Diem says there are 1.7 billion people – 31% of the world’s adult population – who do not have access to a bank account, including 14 million people in the United States.
There may also be new ways for web services like Uber or Spotify to recruit new users through partnerships with other founding members or people who do not have traditional bank accounts.
There will always be a fee, but the original Libra organization was talking about making money transfers much more accessible, including sending money across borders “for a low price.”
What happened to many Libra partners?
Libra quickly lost partners at the end of 2019. Vodafone said they would continue with their M-Pesa project instead.
The original list of partners included Visa, Mastercard, PayPal, eBay, Stripe, Lyft, Uber, Vodafone and Spotify. In October 2019, Visa, MasterCard, Stripe, eBay and PayPal all abandoned their founding member status of the Association.
The move away from the MasterCard, Visa and PayPal trio has been a blow to Libra’s prospects for success.
These companies should have invested at least $ 10 million in the foundation – essentially forming its initial cash reserves. For that money, each of the founders could then form one of the nodes – essentially a group of servers – that will execute the currency transactions.
The Libra Association says departing founding members are not a problem as they will soon be admitting new members. Libra says more than 1,500 companies are waiting to join. Apparently, it would take a two-thirds majority to vote in a particular new member.
Facebook boss Mark Zuckerberg admitted in October 2019 that regulatory concerns were causing Libra trouble. The key problem is that financial regulations are different in different territories.
Therefore, Libra’s chief policy officer, Dante Disparte, has been cited in January 2020 at the Global Blockchain Business Council in Davos that the association “would rather go slow and get it right than assign a launch deadline that prevents us from solving the payments problem for those who need this solution the most.”
Facebook’s digital wallet – Novi
Facebook created a stand-alone subsidiary that was originally called Calibra to manage its contribution to the Libra Association (later Diem). Calibra would essentially be a digital wallet that could be used by consumers. Think of Facebook’s Calibra effort as a competitor to PayPal.
Calibra was supposed to have its own standalone app, but you’ll also be able to use it to pay people in Messenger and WhatsApp as well as – presumably – Facebook itself.
In May 2020, Calibra was renamed Novi, presumably to reduce confusion with Libra.
While Facebook was heavily involved in the creation of the Diem Association, it does not appear to be dominant due to the way the foundation is structured. He says that after the launch he will have the same voting rights as the other partners.
How will it work?
Diem would allow you to send money to almost anyone with a smartphone “as easily and instantly as you could send a text message and inexpensively”. He also hopes to offer people more banking-like facilities, such as bill payment and contactless payments on public transport and in cafes. Apple Pay is clearly in its sights, as potentially are other banks with a strong digital component like Monzo and Revolut.
Diem is completely open source, so even if Facebook creates a wallet on its own, there should be times when other wallets compete with it.
As we mentioned, there are fees – there will probably be small fees that will be paid by the sellers of goods and services, but they can pass them on to the consumer.
Certainly, with Facebook’s security reputation at an all-time low, it remains to be seen how convincing it can be on the subject. Certainly, the creation of Calibra / Novi as a separate company is designed to appease potential critics.
Novi will use the same verification and anti-fraud processes as banks and credit cards “and we will have automated systems that will proactively monitor activity to detect and prevent fraudulent behavior.” There will also be live support to help you if you lose your phone or password and there will be refunds for fraudulent use of your account.
Written by Dan Grabham. Originally published on .
