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Cryptocurrency Libra is taking on a new name today, Diem, in an effort to prove the project has “organizational independence” as it attempts to gain regulatory approvals for launch. The project initially received widespread rejection in part because it emerged from Facebook and in part because its ambitious goals appeared to threaten traditional government-run financial systems. The independent organization running the project, the Libra Association, will now be known as the Diem Association.
Diem, as it is now known, has significantly narrowed the scope since it was first announced. Major launch partners received support in quick succession last year due to its controversial nature and the regulatory hurdles it faced due to concerns from lawmakers. In a hearing of the House Financial Services Commission last year, members of Congress expressed significant distrust of Facebook as they questioned company CEO Mark Zuckerberg about the project’s goals.
It is now said that the project will be launched in a much more limited form. According to Financial Times, the cryptocurrency could debut as a single dollar-backed currency, with an initial launch as early as January 2021. Libra was initially supposed to be a single currency pegged to multiple currencies for stability that could be traded in their place; it was later modified to offer even more coins that would be backed by a different currency. Those coins would be “a complement, not a substitute, of national currencies,” the organization wrote in April.
“The Diem project will provide a simple platform for fintech innovation to thrive and enable consumers and businesses to conduct instant, low-cost and highly secure transactions,” Stuart Levey, CEO of the Diem Association, said today in a press release.
Facebook initially presented Libra as, essentially, a mainstream cryptocurrency that could be spent online or offline, just like the dollar. It was intended to make digital money transfer faster and easier than it is today, and companies like Facebook would be able to offer financial services around it. Facebook initially announced plans for a digital wallet, called Calibra, that could offer these services, with the company positioning Calibra as a means of turning its investment in the project into a potential moneymaker. The wallet app has since been renamed Novi.
The whole thing was, frankly, pretty dense, and it was hard to tell how far it would go in reality. However, fears that it would succeed would clearly be effective in neutralizing some of the group’s goals. It’s not entirely clear what Diem will launch each time it launches, but the group is trying to make it look less threatening than the Facebook-controlled dollar replacement that many initially saw.
