German finance minister Olaf Scholz stated that his government isn’t impressed by Facebook’s stablecoin name change from Libra to Diem, describing it as, “A wolf in sheep’s clothing is still a wolf.”
Libra Association had announced name change December 1, 2020, to allays the fear of potential investors of regulatory uproar against the project.
It also seems Facebook’s involvement isn’t helping either through its use of the Latin word for “day,” best known in the saying, “Carpe diem.”
Associated Project quoted the brains behind the project as saying
“Now transitioning to the name ‘Diem,’ which denotes a new day for the project, the Diem Association will continue to pursue a mission of building a safe, secure and compliant payment system that empowers people and businesses around the world.”
But German authorities are not impressed by the name change when cryptocurrency discussions came up at the G-7 meeting attended by finance ministers and central bank directors of member countries.
Germany may disallow Facebook’s Diem entry into its market
Scholz bluntly said that changing its name would not change its fundamentals, saying Facebook and the Diem Association have failed to adequately address its regulatory risks.
He told Reuters that Germany “will not accept its entry into the market” until it addresses the fundamental problems of regulation.
Diem’s first release, rumoured to be coming in January 2021, will reportedly be a simple U.S. dollar-based stablecoin.
But G-7 leaders said categorically that they would oppose the project until it fully satisfying legal, regulatory and oversight requirements, no mention of specific requirements left to be addressed.
Scholz believes that everything must be done “to make sure the currency monopoly remains in the hands of states”.
It seems Diem is bent on creating a separate currency which may not receive the blessing of the G-7 and its fiat currencies.
The G-7 believes that digital payments should be appropriately supervised and regulated.