Diem Dies in Meta.
Meta (previous Facebook) gave up the Diem stablecoin,
The watered-down version of the once-ambitious Libra global coin.
Increased regulatory scrutiny on both big techs and stablecoins led to the eventual demise of the project.
As much fanfare as it has generated, the project was ill-advised and doomed from the very beginning 3 years ago.
Here is an analogy to explain the obstacles that Zuckerberg did not understand.
"This is a very bold idea. It is equivalent to carrying a bag of new chips, walking into Bellagio or Rio, sitting down, and playing. After a session, maybe without playing at all, people can cash out the chips at the cage and leave the casino with cold hard cash."
"There are several issues with this plan. First, it makes it more difficult to track the source of the chips, whether from real winnings or illegal activities outside the venues. What is more problematic, a casino could, one day, realize it does not have enough cash to meet the cash-out request, as it loses control of the number of chips in circulation."
"Currently, no casino allows chips from outside to circulate in their own games. Similarly, no central bank would give up control of legal tender to a private company."
Above are excerpts from my December 2019 series:
Plus, given the distrust associated with Facebook,
So much that it had to change its name to get a fresh start,
Meta is the last one that regulators want as a digital currency creator.
In the multi-agency stablecoin report released Nov 2021,
Regulators highlighted systemic risk and concentration of economic power,
Which would occur with the link of the stablecoin issuer and commercial entity.
With the number of users as big as Meta,
There are many ways to cut a slice from the payment game,
Minting your own chips is not one of them.
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