The digital currency, which was talked about a lot, has now gone silent. So, what happened to it?
The Update
Libra is no longer called Libra. Yes, you read that right. Libra has been renamed to Diem. The independent organisation that runs the project, the Libra Association, is now called the Diem Association and Bloombergreported that its currency is called the Diem Dollar.
According to a Financial Timesreport in November 2020, the currency was supposed to be launched as early as January 2021. Still we haven’t received any official update from Facebook regarding this but the one thing that is for sure is that Libra has undergone a lot of other changes too, apart from the name.
The Changes
Initially, Libra was meant to be a single coin pegged to multiple currencies for stability that could be traded in place of them. Later, it was changed to also provide multiple coins that would each be backed by a different currency. However, the FT report has said that the cryptocurrency would be launched as a single coin backed by the dollar.
Sources also told FT that the other currencies and the composite would be introduced at a later point. But why are they scaling down the currency? Because of the pressure from global regulators, who have warned that it could threaten monetary stability and enable money laundering.
Apart from this, Libra was pitched, essentially, as a mainstream cryptocurrency that could be spent online or offline. Facebook also announced plans for a digital wallet, called Callibra, which could provide these services. Facebook wanted to position Callibra as its means for turning its investment in the project into a potential money making machine.
Later, Facebook renamed Callibra as Novi and a source told FT that the wallet would not be rolled out everywhere initially, with the firm prioritising “half a dozen high-volume remittance corridors” including the US and some Latin American countries.
Zooming Out
When announced by Facebook, Libra quickly caught the attention of many, including those of regulators. Facebook, which comes with a bad reputation because of the whole Cambridge Analytica scandal, had big plans for the cryptocurrency but now, the operations are being reduced as the future of the coin hangs in the balance.
With the adoption of digital payments accelerating due to the pandemic and the prices of Bitcoin surging, we can understand Diem’s urge to get into the market soon. However, the question whether it will receive the approval of global regulators so that it can be launched is a question that can only be answered by time.
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