Stablecoin has already started changing the world and market of Cryptocurrencies. Though they both are different in characteristics and features. But both of them are forms of digital currencies. And in this digital era, we are going to compare them both with their features along with all the pros and cons that they have. just click here and know about the launching blockchain technology of Diem by Facebook, the market of stablecoins is also going to change a bit more.
What Is Stablecoin?
We can define stablecoin as a form of digital currency that has a stable value price. All these coins or stablecoins are backed with assets or fiat currencies. It can be a new payment method and also has the potential to become an alternate store of value.
What Is Diem?
We all know about Facebook, the social media that is used by most of the world. Diem is a permission-based blockchain system that allows you to make payments by Facebook. In order to avoid the volatile nature, Diem is backed with financial assets or fiat currencies. Though blockchain technology is used here, the concept is a little different from Cryptocurrency. This falls under the category of stablecoin.
How Diem Can Change The Game In Stablecoin Industry
In this digital era, stablecoins are going to give us an alternative solution to Cryptocurrencies. With the launch of Diem, the game in the stablecoin industry can be changed. Here we will discuss how Diem can change the game in the stablecoin industry. With all the benefits that Diem has for the stablecoin industry, we will start the discussion.
1. As A Platform And Single Currency Stablecoin
Diem is going to be launched with the intention of developing a simple global payment system as it is backed with fiat currencies or other financial assets. Instead of backed up with a basket of fiat currencies, Diem by Facebook will be backed by a single fiat currency on a global platform.
This will enhance the global acceptance of this stablecoin. The authority that is launching this stable coin, Diem, Facebook, also has some future plans to work with central banks, regulatory authorities, and financial institutions from all over the world. This has the vision to eliminate the hindrances that are caused by the regulatory authorities and central bank.
2. With Indirect Basket Approach Multi-Currency Stablecoin
Apart from their single currency stablecoin launching plan. The Libra association that is working on all the things related to Diem is also ready to introduce a multiple-currency stable coin. It will be similar to the SDR or special drawing rights, which was issued by the IMF or International Monetary Fund. The most attractive perk that this stablecoin will have is that due to its multiple-currency characteristics, it will be suitable for cross-border or international payments.
3. Compliance Framework
The authority related to Diem also has highlighted money laundering and funding will be taken care of from their side. This offers an extra assurance to the users as any digital currency is prone to be hacked and other online fraud or threats.
Most of the users are not ready yet to invest their money here or take the risk. But with the assurance that the Libra association or Diem will give to them is a bit satisfying. Though the Libra association has not revealed the rules and regulations related to Diem, they have said that they will discuss it later about the regulatory challenges.
4. Libra Reserve
There is a lot of confusion and doubts regarding the Libra reverse. The Facebook stablecoin Diem was first launched with the name Libra, but then due to some issues, the Libra association has revised the technology along with the conditions and terms and gave it a new name Libra.
Along with this, the Libra Reverse was composed with a revised white paper. This Reverse is going to include a minimum of 80% of very short-term government securities that are issued by sovereigns with very low credit risks.
From the earlier discussion, it can be easily understandable that Diem is going to bring some change to the stablecoin industry. The basic technology is the same here, but the advanced concept and asset-backed feature will definitely bring some hope for those who do not want to gamble with their money.