Facebook gives its Stablecoin Libra a new name
As far as the planned launch of Libra is concerned, Facebook is rather behind schedule. Now the child has been unceremoniously renamed. Libra is now called Diem and will also receive a slightly different strategy.
According to a press release, Facebook’s planned Stablecoin will now have a different name. According to the Libra Association, the crypto-currency will henceforth be called „Diem“. To complete the picture of a new dawn, the associated organisation will henceforth be called Diem Association. Some personal details by Bitcoin Revolution have also changed in this breath. Stuart Levey will be the new CEO on 1 December.
The Diem project will enable […] consumers and businesses to make instant, low-cost and highly secure transactions. We are committed to doing this in a way that promotes financial inclusion by extending access to those who need it most.
Stuart Levey, CEO of the Diem Association
said Stuart Levey, CEO of the Diem Association.
It is clear that behind this realignment is Facebook’s aim to address regulatory concerns. Initially, Libra is to become a global stablecoin covered by different national currencies. After about one year of revision of the original idea, the Diem Association is now publishing a new concept paper explaining the changes to Libra’s original approach. According to the paper, Diem is no longer about a global currency, but about a global payment system and a global financial infrastructure.
There were already currency basket plans with Libra
The Association is thus responding to concerns expressed by many critical market observers. They had told Facebook that the monetary sovereignty of the Landesbanken could suffer if a large volume of domestic payments were to be made via the Libra Stablecoin. Therefore, Stablecoins in different national currencies are now also integrated. However, the exact composition of this basket of currencies has not yet been clarified. Each of these national currency specific stablecoins will be fully covered by a reserve in the form of fiat money or government bonds of the national currency concerned. This is not a new approach. David Marcus, head of the Libra Association, had already presented such plans at a meeting of the Group of 30 in Washington in late October.
As the experts Jonas Groß and Alexander Bechtel explained in an interview, a major advantage of the stablecoin specified by national currency is that the investor has the choice of which currency he wants to invest in. For transfers abroad – especially to countries with high inflation – the multi-currency-based coin is the better solution. But only if you have access to this multinational coin from a country whose currency is in the basket. This is not yet clear from the Facebook plans.