Facebook plans to rebrand the Libra cryptocurrency project to Diem (www.diem.com) hoping that the new name would help the revamped project distance itself from the intense pushback from politics and regulation Libra faced when it was announced last year. The political establishment wants to prevent the emergence of private currencies and thus undermine the state monopoly on currencies. With its 2.7 billion active users worldwide, Facebook could certainly have the power to create a new currency monopoly for cybersociety. It will probably take more than a name change to win the support of politicians for Diem.
Facebook could launch its long-awaited cryptocurrency as early as January 2021 in the form of a U.S. dollar-backed stablecoin. In a statement after a video conference of G7 finance ministers last Monday at which cryptocurrencies were discussed, the German Finance Minister Olaf Scholz said that relaunching Libra under its new name of Diem was only a cosmetic change.
“A wolf in sheep’s clothing is still a wolf […] We must do everything possible to make sure the currency monopoly remains in the hands of states.”Olaf Scholz, German Finance Minister
Facebook has 2.7 billion active monthly users, meaning Diem has the potential to become an instant “medium of exchange” in large parts of the world.
The Diem comes at a time when the USA and Europe are flooding their economies with new money as part of a Quantitative Easing (QE). This should also help to cushion the negative effects of the COVID-19 pandemic. In the long term, however, inflation and the depreciation of the dollar and the euro threaten. Private currencies like Facebook‘s Diem could take their place. Politicians and central bankers are afraid of this. Deadly afraid, it seems.