First Facebook tried to distance its toxic name from the Libra stablecoin project it launched and championed by renaming its Calibra wallet Novi in May. Now the Libra Association is following suit, renaming itself the Diem Association in hopes of starting a “new day” for the much-opposed project.
The goal, according to a Dec. 1 release, is to reinforce “its organizational independence as it progresses toward regulatory approval for launch.”
That last part is fairly optimistic, given that the view of the project by groups ranging from the G20 and Bank for International Settlements (BIS) to the European Commission range from suspicious to outright hostile.
As for the Diem Association’s goals, CEO Stuart Levey said the name “signals the project’s growing maturity and independence.”
The project “will provide a simple platform for fintech innovation to thrive and enable consumers and businesses to conduct instantaneous, low-cost, highly secure transactions,” he said. “We are committed to doing so in a way that promotes financial inclusion—expanding access to those who need it most, and simultaneously protecting the integrity of the financial system by deterring and detecting illicit conduct.”
A new day
The association said it plans to “continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world.”
That means focusing on winning over regulators, central bankers, and political leaders who fear the project threatens their control over and even ability to influence economies by creating a global stablecoin capable of bypassing national currencies. That in turn makes it a threat to their ability to “address risks to financial stability” at both the national and international level, according to a draft report the Financial Stability Board prepared for the G7 in October.
It recommended that the launch be halted until national governments put regulations in place and then coordinate them internationally—a process that would not be complete until 2022 at earliest.
That followed a September proposal by the leaders of five of the EU’s biggest economies to bar the libra coin until regulations are worked out—and until the association is based in the EU rather than its current home in Switzerland. The Diem Association has said it is in the process of applying for a payments systems license for Swiss regulator FINMA.
None of that stopped the Diem Association from moving forward with plans to launch a watered-down version of the libra coin as soon as January, according to a Nov. 27 report by the Financial Times. That would be a dollar-backed and U.S.-focused stablecoin (Libra USD, or ≋USD), rather than one backed by a basket of international currencies, as originally planned.
That said, the head of the BIS’ innovation hub said in November that the Libra project has pushed central banks to investigate central bank digital currencies far sooner than they would have.
“The bar for regulatory approval will be high,” Benoit Coeuré warned at the time. “As a new technology, stablecoins are largely untested, especially on the scale required to run a global payment system. They give rise to a number of serious risks.”
A new team
The Diem team is now in place, the group said in its release.
It is headed by Levey, a former U.S. Treasury Department undersecretary for Terrorism and Financial Intelligence, which includes the Financial Crimes Enforcement Network, or FinCEN. Another Leader, Chief Legal Officer Steve Bunnell, has a strong regulatory background. He was general counsel of the U.S. Department of Homeland Security.
The leadership team also includes:
- Dahlia Malkhi, Chief Technology Officer
- James Emmett, Managing Director
- Christy Clark, Chief of Staff
- Sterling Daines, Chief Compliance Officer
- Kiran Raj, Executive Vice President for Growth and Innovation and Deputy General Counsel
- Ian Jenkins, Chief Financial Officer and Chief Risk Officer
- Saumya Bhavsar, General Counsel
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