Libra, Diem, then nothing. Meta (Facebook), which launched a digital currency project to much fanfare in 2019, has just abandoned it. Mark Zuckerberg’s social network had in mind to launch a virtual currency, called Libra, then Diem, to offer a new method of payment faster than an instant message outside traditional banking circuits. This was without taking into account the outcry from central banks, regulators and political decision-makers who were worried about the risks to the stability of the financial system, the fight against money laundering and the protection of personal data.
Meta renamed its project Diem at the end of 2020 after the defection of several partners like PayPal, Visa and Mastercard. A technological brick that seemed inseparable from its future metaverse on which the social network is putting the package… Three questions to clarify this announcement.
Does the abandonment of Diem call into question the metaverse project?
“As far as I know, Diem is dead,” analyst Rob Enderle told AFP. For him, Facebook’s reputation has reached a point “where they are going to have a very hard time doing something major”. However, Mark Zuckerberg unveiled his metaverse project at the end of 2021, the first technological bricks of which were launched in the United States and Canada under the name of Horizon Worlds. “This battle over virtual currency is lost but they hope to come back in force with the metaverse”, analyzes Sajida Zouarhi, engineer and Blockchain expert counted among the 40 most influential women in France in 2019 according to Forbes.
The social network is trying to rebuild its reputation with users, by changing its name, and to attract younger generations thanks to its metaverse. “Meta has more legitimacy in the metaverse space than in the cryptocurrency space. Virtual reality is an important workhorse in the conquest of the metaverse and it owns Oculus, which specializes in VR headsets,” continues the specialist. Virtual reality technologies are key to creating an immersive experience in the virtual universe. With the explosion of digital uses during the health crisis, the metaverse could become a new form of interaction. A 3.0 social network.
Isn’t virtual currency a fundamental of the metaverse?
The metaverse is not without cryptocurrencies and NFTs (non-fungible tokens). Digital currencies to buy virtual items sold in the form of digital tokens. So what can we do without Diem? In reality, Facebook does not need to offer an in-house virtual currency to create its global virtual world. “In a metaverse project, we have access to many means of payment: virtual currencies, cryptocurrencies and even traditional means of payment”, insists Sajida Zouarhi. The user experience will change but the virtual world can integrate any financial service. Finally, Facebook returns to its core business: the social network.
Is this good news for our personal data?
If the Diem virtual currency had seen the light of day, it would have been one more tool for collecting users’ personal data. Facebook (Meta) would have had access to the financial behaviors of its users, in addition to everything else. But with a metaverse, it’s even worse. “Facebook will create a virtual universe where it will collect an unimaginable amount of personal data that it can exploit with impunity, Sajida Zouarhi is alarmed. We don’t even have time to rejoice in Diem’s failure that a metaverse appears. It’s like the hydra: faced with a powerful organization like Facebook, when you cut off one head, it pushes back two others”. In the metaverse, the user can buy a house, land, he has access to services. Without counting the management of its virtual identity with the avatars, a kind of extension of ourselves. Meta will capture even more information about its users and get even richer.