Libra Association will rebrand the Libra project to distance itself from Facebook’s original concept. The stablecoin will get a new name-Diem.
Libra Association members reported that Diem translates from Latin as “day”. The name symbolizes a new beginning and the readiness of the stablecoin to launch next year. To date, the Association consists of 27 members.
The organization has already formed a team of managers. The position of technology Director will be taken over by Dahlia Malkhi, the head of Human Resources will be Christy Clark, the functions of Legal Director will be performed by Steve Bunnell, and Kiran Raj will become Executive Vice president of development and innovation, as well as Deputy General Counsel. Previously, the CEO of Libra Association was Stuart Levey, the managing director was James Emmett, the Director of Regulatory Compliance Supervision was Sterling Daines, the CFO was Ian Jenkins, and the General Counsel was Saumya Bhavsar.
After Facebook introduced the Libra stablecoin, which caused dissatisfaction from regulators, who considered Libra to be a threat to the traditional banking industry. Regulators demanded that all Libra-related developments be stopped until lawmakers can develop appropriate regulation and ensure that there are no risks to financial stability.
In April, Libra developers upgraded the project structure. According to the updated technical document, the value of the underlying LBR cryptocurrency will be calculated based on a whole basket of stablecoins linked to fiat currencies. Levy believes that thanks to such changes and the “distance” from Facebook, which is not a member of the Association, regulators are gradually beginning to change their attitude to the project.
According to the updated White Paper, Facebook will play a minor role in managing the project. In the original document, released in June 2019, Facebook was mentioned six times. In addition, the document stated that Facebook will retain a leading role in the project until 2019.
“We believe that regulators welcome independent associations that are able to make their own decisions. We have a strong team of leaders who know how to manage the project. Partly for this reason, we decided to change the name of Libra to Diem. Another reason for the name change is that the early version of the project received stiff resistance from regulators, ” Levy said.
He said that the first stablecoin called “Diem Dollar” will be pegged to the US dollar. Diem Dollar will be released after receiving a license from the Swiss Financial Market Supervisory Agency (FINMA), so Levy did not give a specific time frame for the launch of the coin. Initially, Libra management planned to present the project in the first half of 2020, but due to problems with regulators, this was not possible.
According to Levy, Diem will comply with international standards, including the rules of the Financial Action Task Force (FATF), which will ensure the protection of users. Levy added that the organization interacts with global regulators on how widely each coin can be traded, and what fiat currency it can be pegged to. The future actions of the Libra Association will depend on a number of factors, including the favor of regulators.
The developers said that at the technical level, the project is already ready to launch, but they continue to test it and implement improvements. Despite the changes and rebranding, the project will still work on the basis of the blockchain. First of all, Diem will be used for international transfers, as well as for payment for goods and services. Levy does not see the need to launch a Diem coin immediately with the support of an entire basket of stablecoins, but does not rule out such a possibility in the future.
“We will not launch a multi-currency stablecoin, as we first plan to launch stablecoins, each of which will be provided with a certain currency. This is the advantage of programmable money, when you can create a multi-currency stable coin with different stablecoins tied to different fiat currencies.”
Recall that a few months ago, the Governor of the Bank of England, Andrew Bailey, called on regulators to unite to develop an international regulatory framework for the effective regulation of stablecoins.