Libra, the Facebook-backed digital currency is undergoing another rebranding phase in a bid to smoothen lingering regulatory wrinkles.
Since its announcement in mid-2019, regulators have railed against Libra, arguing that the project could upend global monetary policy control protocols.
Indeed, Libra’s emergence likely provided the catalyst for more serious considerations surrounding central bank digital currencies (CBDCs).
Libra Looking to Please Regulators With Name Change
According to Reuters, the Libra project is rebranding itself by changing its name to “Diem,” the Latin word for “day.” Thus, the Swiss-based Libra Association will now be known as the Diem Association.
Commenting on the name change, Diem Association CEO Stuart Levy remarked that the move is part of the project’s efforts to simplify its objectives for regulators, adding:
“The original name was tied to an early iteration of the project that received a difficult reception from regulators. We have dramatically changed that proposition.”
Indeed, the Diem project has undergone significant changes following widespread pushback from regulators across the globe. From a “Facebook coin” backed by a basket of fiat currencies, Diem will instead issue individual stablecoin species, each pegged to a specific national fiat.
As previously reported by BeInCrypto, Diem is looking to launch one of its coins (a dollar-pegged token) in Jan. 2021.
However, this plan is contingent on receiving regulatory approval from the Swiss Financial Market Supervisory Authority (FINMA). Diem previously applied for a FINMA payments license back in Sept. 2019.
Regulators Firmly Against Private Stablecoins
According to Levi, Diem is not cutting ties with Facebook despite the name change. Facebook’s association with the project remains one of the major reasons for the regulatory backlash targeted at Diem.
In a recent article, Christine Lagarde, President of the European Central Bank (ECB) doubled down on the perceived dangers of big tech-led payment projects. According to the ECB head, private stablecoins pose greater risks to financial stability than Bitcoin (BTC).
Lagarde, like other members of the mainstream financial establishment, says CBDCs are a viable countermeasure against private stablecoin projects like Diem. Apart from creating CBDCs, regulators are also proposing stricter regulations for stablecoins.