In 2022, Meta, the company that owns Facebook, abandoned its plans to launch a digital currency called Diem. The project was deemed non-starting as it failed to convince US regulators to implement it.
Despite Meta assuring government officials that they had ceased their exploration of digital assets, the filing of several trademark applications raises concerns that the company may still be interested in cryptocurrencies. Congresswoman Maxine Waters, a member of the Democratic Party, expressed her concerns in a letter to CEO Mark Zuckerberg, which was sent on January 22, 2022.
Meta’s trademark filings raise concerns about digital assets
In her letter, Waters pointed out 5 trademark filings that she believes “indicate that Meta has not ceased its digital asset-related activities after the closure of Diem.”
Meta’s continued interest in cryptocurrencies seems contradictory to the statements presented to the House Financial Services Committee in October 2023. According to Waters:
“Meta employees stated that the company is currently not engaged in any activities regarding blockchain-based products nor does it plan to do so. Additionally, Meta employees assured that they are not collaborating with any partners to integrate stablecoins or cryptocurrencies into any payment products or metaverse, nor are they conducting any research or development work in this area.”
Appealing directly to Zuckerberg, Waters asked if Meta still has an interest in cryptocurrency payment research and development and if the company is considering implementing distributed ledger technology on any of its platforms.
At the time of writing this article, Meta has not responded to Waters’ letter or CCN’s inquiries.
Why did legislators block Meta’s stablecoin project?
Originally known as Libra, Diem was intended to be a stablecoin that would facilitate payments on Meta platforms such as Facebook and Instagram.
Meta’s initial plan involved creating an international cryptocurrency whose value would be backed by reserves consisting of US dollars, euros, British pounds, Japanese yen, and Singapore dollars. However, over time, Meta scaled back its ambitions for Diem, opting for a more conventional dollar-based stablecoin instead.
In 2019, when Diem was still known as Libra, Waters appealed to Meta to halt the development of the proposed stablecoin, arguing that the cryptocurrency market currently lacks the “appropriate legal framework” necessary to support this technology.
The congresswoman also expressed concerns that the project could expand Meta’s influence and pose a threat to the lives of Americans using their platforms.
Lack of progress in stablecoin regulation
At the time of opposing Diem, Waters emphasized that the proposed stablecoin should serve as a warning to regulators who should “seriously address privacy and national security issues, cybersecurity risks, and the trade risks posed by cryptocurrencies.” However, since then, congressional efforts to regulate stablecoins have made little to no progress.
Though introduced by representatives from both sides of the aisle, none of the bills proposing regulations for stablecoins have gained the necessary bipartisan support.
FAQ
1. What is Diem?
Diem was a planned digital currency introduced by Meta, the owner of Facebook. However, the project was abandoned in 2022.
2. Is Meta still interested in cryptocurrencies?
Despite dropping the Diem project, trademark filings suggest that Meta may still have an interest in cryptocurrencies.
3. Who expressed concerns in the letter to Mark Zuckerberg?
Congresswoman Maxine Waters, a member of the Democratic Party, expressed her concerns in a letter to the CEO of Meta.
4. What were the main concerns regarding Diem?
The main concerns revolved around regulation, privacy, national security, cybersecurity risks, and trade risks.
5. Did Meta respond to Congresswoman Waters’ letter and questions?
Meta has not responded to the letter or CCN’s inquiries regarding their interest in cryptocurrencies.
6. Why did legislators block the Diem project?
The Diem project was blocked by US regulators who did not believe in its proper implementation and had concerns about regulations and security.
7. What was the original idea behind Diem?
Originally known as Libra, Diem was intended to be an international stablecoin based on a basket of reserves consisting of different currencies.
8. What does Congresswoman Waters advocate for in stablecoin regulation?
Congresswoman Waters calls for serious consideration of privacy, national security, and risks associated with cryptocurrencies. However, legislative efforts to regulate stablecoins have made little progress.
Definitions
– Digital currency – a form of currency that exists only in the digital world, typically independent of financial institutions and central banks.
– Stablecoin – a type of digital currency that typically maintains a stable value because it is backed by reserve assets or other means.
– Cryptocurrency – a type of digital or virtual currency that uses cryptography for secure transactions and control of new unit creation.
– Regulators – institutions or government bodies responsible for regulating and supervising a specific sector or industry, including cryptocurrencies.
– Cybersecurity – practices and measures used to protect computer systems and data from threats in cyberspace.
Useful Links
– cnbc.com – homepage of the main CCN domain in English.
– meta.com – homepage of Meta, the owner of Facebook.
The source of the article is from the blog lisboatv.pt