The Libra Association put together by Facebook last year is rebranding in further efforts to distance itself from the original Facebook-led vision rolled out last year.
The group, composed of 27 member firms, announced Tuesday it was changing its name to Diem (the Latin term for “day”) as it gears up for the potential 2021 launch of a single, dollar-pegged stablecoin. The organization has also finalized its leadership team, which includes Dahlia Malkhi as chief technology officer, Christy Clark as chief of staff, Steve Bunnell as chief legal officer and Kiran Raj as executive vice president for growth and innovation and deputy general counsel.
The new hires join the previously announced CEO Stuart Levey, Managing Director James Emmett, Chief Compliance Officer Sterling Daines, Chief Financial Officer Ian Jenkins and General Counsel Saumya Bhavsar.
Social media giant Facebook unveiled Libra in June 2019 after over a year of secretive development and research work. At the time, the project envisioned a stablecoin backed by a basket of fiat currencies, one that could be used worldwide as a means of exchange. It immediately prompted international regulatory backlash, with lawmakers demanding that all development cease until they could better understand it, provide some level of regulatory oversight and ensure there were no risks to financial stability.
A number of its original members departed, mainly financial services firms citing regulatory risks, before Libra could even get started.
Libra’s governing body, which was formally created in November 2019, later tightened the scope of the project, announcing in April 2020 that it would launch a group of stablecoins that were each backed by a single fiat currency or asset instead of the basket-backed token.
Levey believes regulators are warming up to the project, particularly through the changes and the implied distance from Facebook (which wasn’t named in Tuesday’s press release), which isn’t itself a member of the governing association, though its subsidiary Novi (formerly Calibra) is. Another founding member includes Breakthrough Initiatives, a space exploration group run in part by Facebook founder Mark Zuckerberg.
“I think regulatory stakeholders really are welcoming a more autonomous association. They want to see an association strong enough to make its own decisions and have a leadership team that is capable of directing the project. It is in part for that reason we decided to change the name, to move from Libra to Diem, and that will be effective [Tuesday],” he told CoinDesk.
A revised white paper also reduces Facebook’s role. While the original document released in June 2019 mentioned Facebook six times and said that “Facebook is expected to maintain a leadership role through 2019,” and noted its creation of Novi, the December 2020 version only said, “While Facebook teams played a key role in the creation of the Association and the Libra Blockchain, they have no special rights within the Association.”
Libra is ready to launch its first stablecoin, the “Diem dollar,” as soon as the new entity is licensed through the Swiss Financial Market Supervisory Authority (FINMA). The Financial Times first reported that a dollar-pegged coin could launch last week.
Levey declined to provide a timeframe, noting that FINMA will make its decision in its own time.
Libra originally planned to launch within the first half of 2020, but the regulatory hurdles complicated these efforts.
Diem’s coin, when it launches, will be compliant with international regulations at the protocol level, Levey said. He said this means that compliance with regulations such as the Financial Action Task Force’s “travel rule” will be baked into the network, as will other features like consumer protection.
“That then brings you back to the question of why change the name. … One of the reasons is that the original name, I think, was tied to an earlier iteration of the project that [saw a] difficult reception from from regulators around the world and we’ve changed the proposition dramatically,” Levey said.
The organization is still engaging with regulators worldwide to clarify how widely each token can circulate and which fiat currency the next coin will be pegged to. Levey said a number of factors will go into these considerations, including the comfort level of regulators.
The project is ready to launch at a technical level, though developers are continuing to test and iterate on the design, Levey said. And while the project has evolved in scope since its unveiling, it still uses a blockchain.
“We think that there are technological and governance advantages from having a blockchain. It permits innovation and collaboration in the open source space that we think adds real potential to the overall project, it adds collaboration and innovation and frankly one of the things I love about it is there’ll be use cases developed and innovations that we at the Diem, Libra Association would never have thought of ourselves,” he said.
International remittances and merchant payments are still the two primary use cases that the project is eyeing at the moment.
And while Levey said he doesn’t feel “a particular sense of urgency” around launching a basket-backed stablecoin, he can see that being a possibility in the distant future.
“We would aspire to issue other single currency stablecoins over time, and then we wouldn’t issue a multi-currency stablecoin, but … this is the beauty of programmable money, you can create a multi-currency stablecoin, if we have a certain number of individual single currency stablecoins out there,” he said.
UPDATE (Dec. 1, 2020, 15:45 UTC): Added additional information from the white papers and launch timing.