Facebook: We can restore a broken payment system2 min read
According to David Marcus, head of the financial services technology company’s subsidiary, Facebook wants to “justly try” to restore today’s broken payment system.
Launched in 2009, Facebook Payments enabled more than $ 100 billion in payments, Marcus said in a Wednesday report on Facebook’s role in improving financial systems. According to Marcus, Facebook’s platform and other financial services projects have faced unfair opposition from traditional financial players and regulators, but the company is ready to be taken seriously.
Opposition has largely focused on Novi, Facebook’s planned digital wallet, which would allow fast and often free money transfers. The technology giant intended to combine Novi with its stablecoin Libra, but encountered regulatory restrictions.
In 2019, former President Donald Trump declared that the pound would lack “status and reliability” and that stablecoins would never be recognized as “real” currencies. Benoit Coeure, a member of the board of directors of the European Central Bank in 2019, also expressed concern that the pound posed a threat to the dominance of the US dollar.
After the objection, Facebook renamed the Libra project to Diem. Diem is now overseen by the non-profit Diem Association, which seeks to address government and regulatory issues.
In May 2021, Facebook announced a partnership with Silvergate Capital, under which the banking holding company will be the exclusive issuer of stablecoin Diem USD. The move is largely seen as a way to reach regulators, some say.
Michael Del Grosso, an analyst at Compass Point Research and Trading, said that Libra had relatively much resistance, and subsequently Facebook decided to follow a regulatory approach, rules and go for all government licenses to transfer the money it needs with Novi. Then he and Diem went to a member of the Fed – Silvergate.
According to Marcus, Facebook is a “challenger” in the financial payments industry. The Novi wallet allows users to send and receive US dollars, euros and other fiat currencies free of charge. According to Marcus, however, Facebook is not quite ready to give up the inclusion of stablecoins. A closed payment system using only fiat currency “will not save”.
In addition, according to Marcus, many projects lack a safe, well-designed stablecoin that is really covered in one-on-one fiat currency. This could offer consumers stronger protection and payment options.
Facebook is committed to achieving this goal while complying with regulations. Novi Wallet is licensed or approved in most US states. The Diem stablecoin project “addresses all legitimate concerns.”
Facebook would really like to renew its payments. If you have a profile on this social network, would you use these payments?