Christian Catalini, the projected digital stablecoin Diem’s chief economist, stated that the Diem would be phased out as soon as a Federal Reserve-issued central bank digital currency (CBDC) became available.
The Diem, formerly the Libra, is a group of 26 financial firms working on launching a stable coin tied to the dollar later this year. It is based on blockchain technology and seeks to make money transfer instantaneous, open, and low-cost.
Its predecessor, the Facebook-backed Libra, was met with significant criticism from policymakers, who thought it would take over control of the monetary system and, given Facebook‘s track record in certain areas, endangers user privacy.
As a result, to gain regulatory approval, the project has been rebranded and is now handled by a group of companies rather than Facebook. One such them is Facebook’s digital wallet Novi.
Said Christian Catalini,
To make its digital stablecoin more acceptable, the Diem organization has focused on privacy and competitiveness. Here’s how Catalini explains his reasoning:
Catalini commented on the idea of connecting Diem with DeFi: