Following the news that Meta (Facebook) is looking to sell off its Diem’s assets;

Chris Dinga, Payments Analyst at GlobalData, a leading data and analytics company, offers his view:

“Diem, the stablecoin project being developed by Meta, is collapsing after years of battling regulatory oppositions. Since it was announced by Meta, regulators have rejected the idea of a stablecoin being built and controlled by Meta. Concerns were raised about the impact it could have on the global economy—as it would make Meta responsible for a digital currency that would directly compete with fiat currencies—as well as concerns about its ability to enforce anti-money laundering rules. No governments could willingly accept the creation of a digital currency that could undermine their authority.

“The last nail in the coffin for Diem was losing Silvergate Bank, which was meant to be its banking partner and issue the stablecoin. However, the US Federal Reserve informed Silvergate that it would not provide support if it went ahead. This left Diem with no way of issuing its coin.

“Cryptocurrencies are a disruptive technology that have the potential to challenge central banks by allowing companies and individual to create their own digital currencies. Despite the effort of some platforms like PayPal and Crypto.com to facilitate the use of cryptocurrencies as a mean of payment, cryptocurrencies are mainly being used as speculative assets on crypto exchange platforms. However, initiatives such as Diem highlight the need for regulatory frameworks on cryptocurrency and blockchain sector. Governments need to actively start working on regulations to oversee the sector and ensure that they protect the economy and consumers.”