German Finance Minister Olaf Scholz believes that the rebranding of the Libra project and the change of the name of the stablecoin to Diem do not reduce the threat to the financial system.
Last week, members of the Libra Association announced the renaming of the project to Diem. They will not immediately launch a multi-currency stablecoin, as was implied in the project’s White Paper. The Association plans to launch separate stablecoins, each of which will be backed by one fiat currency. These changes are aimed at distancing themselves from the original concept of Facebook and gaining the trust of regulators.
However, at the meeting of representatives of the “Big Seven” (G7) Finance and Central Bank directors Olaf Scholz (Olaf Scholz) He criticized this approach, calling Diem “a wolf in sheep’s clothing”. Scholz said that the new name will not change the basic principles of the project and will not eliminate existing regulatory risks. As long as this stablecoin poses a threat to the banking industry, German regulators will not allow it to appear on the market.
Previously, G7 leaders have made similar statements, making it clear that they will oppose the Libra coin until the introduction of clear legislative and regulatory requirements for international stablecoins. However, the Diem Association said that the first Diem Dollar stablecoin pegged to the US dollar will comply with international FATF rules and regulations. At the same time, Scholz did not specify what requirements the yet-to-be-released Diem must meet. The minister called on regulators to do everything possible to ensure that ” the currency monopoly remains in the hands of states.”
Scholz has been negative about cryptocurrencies before. He is still convinced that cryptocurrencies have no economic value, but can be used to finance terrorism and money laundering.