Facebook-led digital currency project, Diem is set to launch a small-scale pilot project of its first stablecoin later this year, a source familiar with the matter told CNBC. According to the report, Diem Association, a Switzerland-based firm building the project, plans to launch a dollar-backed stablecoin largely focused on payments between individual clients.

The pilot stablecoin will also be used across merchant shops allowing users to buy goods and services, too, the anonymous source further stated.

Diem is currently in talks with the Swiss regulators to obtain a payment license, CNBC’s report further reads. This follows a difficult period dealing with regulators in the U.S. and constant backlash from global financial authorities who have stated the dangers of the stablecoin on the global monetary system and money laundering.

Launched as Libra in 2019 and rebranded to Diem last December, the project has backtracked its steps in creating a Libra stablecoin backed by several fiat currencies such as the dollar and euro multiple “stablecoins” backed by a range of assets. Speaking to CNBC, Ran Goldi, CEO of First Digital Assets Group, stated the vision and goals of Diem have “changed dramatically over the past year and a half from a naive blockchain to a very sophisticated blockchain” to be in line with financial regulators across the globe.

Ironically, the launch of the Facebook-led project was the match that set a fire to central banks looking into CBDCs in a push to challenge Diem.

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