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Facebook has officially announced that its digital currency, which was introduced as Libra last year, has been changed to Diem Association following its plan to correct some errors with the scheme.
According to a statement released on Tuesday, the new name will further capture the currency’s independence while upholding a different approach. The name change is also Facebook’s way of correcting the conflicts that came with rolling out Libra, as they needed the fastest means to bury the misconceptions.
The U.S. government also expressed dissatisfaction when Facebook wanted to launch Libra, stating that money launderers and terrorist financiers could misuse the currency.
Facebook is trying to disassociate from the past when they had issues with regulators who saw Libra as Facebook’s attempt to dominate the financial world. Addressing the name change, Avivah Litan, a security and privacy analyst at Gartner, said:
“Branding and marketing can make a difference, but astute financial regulators are not going to change their mind because of a name change. Whether Libra or Diem, many will still think Facebook has hidden plans.”
On the other hand, many people do not know Instagram and WhatsApp belong to Facebook. So for people like that, the name change does not make any difference. Many regulators are already adamant about the name change, as this is not the first name change in Facebook’s currency scheme.
Since Facebook launched its currency scheme in June 2019, it has had to give it a different look several times. Originally, Libra was going to be backed by a suite of global currencies rather than only the U.S dollars. But plans were altered, and it is now gearing up to be a digital version of the U.S. dollar.
However, the digital currency scheme may likely benefit from a change in administration since members of the Biden team are not afraid of cryptocurrencies.
Avivah Litan also added:
“The new administration will not have this knee-jerk negative response anytime they hear about cryptocurrencies. Although this administration may disagree with Facebook on some issues, they will have a better take than the previous administration. And the good thing is, despite their sentiments, Trump’s administration did not make overly regressive policies that could have stifled innovation.”
With over 1,000 digital currencies in existence, one may question the need for another cryptocurrency. But the natural love for innovations inherent in man is exciting, and that is the driving force behind the significant progress in the tech and crypto space.