Libra moved closer to supervision and changed its name to Diem. Will it break the stablecoin market this time?

Editor's Note: This article comes fromGolden Finance, reprinted by Odaily with authorization.

Golden Finance

Golden Finance

, reprinted by Odaily with authorization.

Libra, which once received a regulatory "boycott", has recently changed its name to Diem, aiming to regain regulatory approval by emphasizing the independence of the project. Can Diem succeed this time? What impact will it have on the stablecoin market?

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On December 1, media sources pointed out that the Facebook-backed cryptocurrency Libra has been renamed Diem, aiming to regain regulatory approval by emphasizing the independence of the project.

Stuart Levey, chief executive of the Geneva-based Diem Association, said the name change was to emphasize a simpler, more established structure: "The original name was linked to an earlier version of the project, but the regulator's reaction to the project was mixed. Not good. We've changed that proposition dramatically."

In addition, Levey further explained that Diem means "day" in Latin, and now the goal of the project is to launch a digital currency backed by a single dollar.

In the face of regulation, can Libra, which has repeatedly compromised, be launched this time? Earlier, according to the British "Financial Times" report, Facebook plans to issue the cryptocurrency Libra in a limited form as early as January next year.

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Has been revised in many ways

In fact, since the launch of Libra, there have been many changes and adjustments in the face of regulation.

On June 18, 2019, Facebook released the Libra white paper, but the project soon caused trouble for skeptical regulators around the world, and the development of Libra also encountered regulatory opposition.

On July 17, the Financial Services Committee of the U.S. House of Representatives held a hearing on Facebook's virtual currency. On September 13, the French Ministry of Finance stated that France and Germany had agreed to boycott Facebook's Libra cryptocurrency. On October 5, PayPal announced that it would abandon participation in Facebook's cryptocurrency Libra. In October, the five European Union countries led by France are jointly boycotting Libra's entry into the European market, and are preparing to ask Facebook to abandon the project.

Under such circumstances, the progress of Facebook-led digital currency project Libra has been faltering. Not only that, due to the "suppression" of regulators, some early partners also retreated and announced their departure from the Libra Association.

Under pressure from regulators, Facebook has decided to offer its users digital versions of government-backed currencies, including dollars and euros, in addition to its proposed Libra token. At the same time, Facebook scaled back its plans for the Libra global digital currency and will not use it in its own services for the time being. At the earnings conference call at the end of January 2020, Facebook CEO Mark Zuckerberg (Mark Zuckerberg) stated that the Libra project will be fully handled by the Libra Foundation, which is "separated" from Facebook. But Facebook will not give up its efforts in the payment field.

On April 16, 2020, the Libra Association released the white paper 2.0. In the white paper 2.0, four major changes were made in the design of the Libra payment system to actively move closer to supervision.

In the white paper 2.0, four major changes have been made in the design of the Libra payment system, including:

2. Improve the security of the Libra payment system through a strong compliance framework;

3. While maintaining the main economic characteristics, abandon the transition plan from the alliance chain to the public chain system;

4. Establish strong protection measures for Libra's asset reserve.

Up to the current name change, Libra finally succumbed, and after deciding to issue a single-currency stable currency, it stepped closer to supervision and sought approval.

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The influence geometry of the stablecoin market