The Libra association in its anticipation of a 2021 launch has decided to rebrand itself and distance the initial blow back press it received. Libra will be now known or branded as Diem. The 27 member firms comprising the association decided before its launch that they might be better served to rebrand as “Diem” which is the Latin word for “day.”
Diem is a dollar-pegged stable coin payment system previously known as the Libra Association. The rebranding effort is meant to redefine the vision of the association including it governance. It is also a potential nod to distancing itself from the original Facebook dominated vision which potentially played a role in regulatory angst.
THE STORY OF THE DIEM ASSOCIATION
Diem is a global payment network that is scheduled to launch sometime in 2021. It will operate through Diem Blockchain.
In 2019, the social media giant Facebook worked diligently to assist in the launch of Libra, which was envisioned to be a fiat backed a stable coin. This stable coin was originally designed to be backed by a group of several currencies. The goal of the project was to establish a global network whereby the Libra stable coin could be utilized as a means of exchange.
By the year 2020, the governing body decided to launch a more focused project that weighed and addresses previous governmental and regulatory concerns. The project now aims to launch a collective group of stable coins verse one coin that originally contemplated relying on a basket of currencies, verse the current approach of tying each coin to a separate currency.
Facebook who was originally alleged to be the driving force behind the association appears now to be represented by one of its subsidiaries, with its’ influence over the governance aspects curtailed to allow for more equity amongst the governing bodies. This approach presents a more autonomous governance front. The change in the project vision and governance does appear to distance the original project vision away from the implied or perceived control by Facebook. Although this was not directly said in the press release describing the rebranding, the changes and move away from Libra was not lost on the crypto community.
Ever since Facebook announced launching a payments system, political push back started to surface against the project. Within a few days of the Libra announcement, both regulators and financial companies took a keen interest in the project. As the project progressed it started to face huge domestic opposition from the both the U.S. Senate and House Financial Services Committee.
The interest in the project quickly started to transform to scrutiny and concern from other central banks, governmental agencies, and financial companies.
The Libra project as originally contemplated was designed to integrate in part with social media platforms. This contemplated integration gave rise to concerns by the U.S. government, financial institutions and interested parties. Collectively the concern was the potential collapse of the conventional financial and payment system that is currently heavily regulated. Also, there was concern that there was or would be insufficient oversight of the Libra association in many areas that were both financial and non-financial in nature.
As the pressure from numerous governments mounted on the Libra association, its launch date continued to postpone. In its recent press release, the Libra Association decided to change its name to Diem representing a new day for the association. This rebrand was also meant to signify changes in the original project stable coin structure. The current project now appears to aim for a launch with a stable coin(s) backed by individual fiat tokens.
The launch of Diem still hinges on regulatory approvals that include international operational protocols and consumer protection. At play are addressing all the domestic and international requirements of various governmental concerns and how widely a coin might travel.
Stay tuned, it appears that the financial innovation and advantages by Diem will likely emerge in some fashion over time with respect to the use model of stable coins employed as part of the payments system.