/Libra rebrands as Diem to reduce Facebook stigma

Libra rebrands as Diem to reduce Facebook stigma

Libra changed its name to Diem Tuesday in a bid to distance the online payments initiative from Facebook.

“The original name is tied to an earlier iteration of the project that received a difficult reception, shall we say, from regulators and other stakeholders,” Stuart Levey, chief executive of the Libra Association, said in an interview.

The rebranding comes alongside a series of management hires as Diem prepares to inaugurate its Swiss-based service, which is backed by 27 member organizations and companies, including Facebook, Spotify, Lyft and Uber.

Policymakers internationally, within the EU and elsewhere have demanded strict safeguards on the proposed system, fearing that its global reach via Facebook’s 2.7 billion users could make it a rival to official currencies. The service is based on stablecoin technology, a financial digital asset that is tied to a reserve fund of conventional currencies to help maintain its value.

Levey said the project has undergone big changes since its unveiling last year that “should be welcomed more by regulators.”

The Financial Times reported last Friday that the system will launch in January.

Levey played down the date, stressing that the timeline is in the hands of Switzerland’s financial watchdog.

Diem’s first stablecoin will be backed by the U.S. dollar, “which I think will be significant,” he said, because “the dollar is the most used currency.”

A euro-based stablecoin would come “at some point in the future” and might coincide with the European Central Bank’s plans to issue a digital currency, Levey added.

The chief executive was scheduled to address EU lawmakers later Tuesday in a private discussion online, as they consider legislation on stablecoins.

Levey stopped short of commenting on the bill, but he did say “we’ll have comments and suggestions for improvements.”