Diem aims to replace USD stablecoin with gov digital dollar

Thursday 27 May 2021 09:03 CET | News

The recently announced Diem USD stablecoin is intended as an interim step until the US Federal Reserve issues a central bank digital currency (CBDC) or digital dollar.

The announcement was made by Christian Catalini, the chief economist of Diem (formerly Libra), at Consensus 2021 and was cited by Ledger Insights. Diem would be willing to collaborate with public sector because it has the competitive advantage of developing anything that has to do with stability, money, value preservation, and macroprudential policy.

Furthermore, Diem won’t rely on interest income on the reserves that back the stablecoin because those reserves will mainly be in the form of Treasuries with maturities of less than 90 days, the online publication added. Instead, Diem will generate revenues from transaction fees.

The low costs of payments are backed by Diem’s cost-effective technology choices and the fact that other payment providers have legacy infrastructure and are not interoperable, as per Catalini. Regarding privacy and customer protection, Diem is going to be privacy by design, with the association also encouraging privacy as a dimension of competition on the network.

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Keywords: Diem, Diem Association, stablecoin, digital dollar, e-wallet, data privacy
Categories: DeFi & Crypto & Web3
Countries: United States
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DeFi & Crypto & Web3