December 6th, 2020 WEEKLY NEWS UPDATE
Facebook-Backed Libra Facebook’s Libra Facebook’s Diem Association changes currency to launch stablecoin is an its name to Diem next year in limited existential threat to
format traditional banking
“We like the connotation of it Long-awaited project to Stablecoins are an kind of being a new day for arrive as soon as January, integral part of the future the project,” the group’s chief with just one dollar-backed of the financial system..
executive officer, Stuart coin. Levey, said in an interview.
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Serendipity Capital 2020 December 6th, 2020 WEEKLY NEWS UPDATE
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In Focus: Libra is Repositioned as Diem
What's Happening? Libra Association, the cryptocurrency group started by Facebook, has changed its name to Diem, Latin for "day". It will now be known as Diem Association with Diem Networks to serve as the payment system operator. The group’s chief executive officer, Stuart Levey, said in an interview. “We wanted a new start.”
How has Libra's vision changed with the shift to Diem? Announced in June 2019, Libra’s scaled-down vision for Diem is the result of concerns voiced by global regulators who are worried about threats to monetary stability, user privacy and money laundering potentiality. Given that continued regulatory scrutiny, a high-profile group of founding members (PayPal, Mastercard, Vodafone and eBay) subsequently quit the association and distanced themselves from the controversial project.
The new vision and it's scale:
• Initially, Libra had proposed creating a cryptocurrency supported by a basket of government-issued fiat currencies and debt securities. However next year's launch is expected to be tied only to the U.S. dollar. • Pegs to other currencies and a "digital composite" of all Diem coins may come later. • Diem has abandoned it's goal to have at least 100-members before launch (currently there are 27 participants). • While Libra had global aspirations, Diem's launch may be initially limited to only the US and a few countries in Latin America.
What's coming next? The Diem Association plans to issue a cryptocurrency, "The Diem Dollar" which will be backed one-to-one by the US dollar, in 2021. Since the Diem Association is based in Geneva, the stablecoin will require approval from Switzerland's Finma, the country's financial-market regulator. The Novi wallet (formerly branded Calibra) will likely launch at the same time and the Diem Dollar will be able to be used via the wallet, or through Facebook Messenger and WhatsApp. Novi will be rolled out to a “half a dozen high-volume remittance corridors” including the US and some
Serendipity Capital 2020 December 6th, 2020 WEEKLY NEWS UPDATE
Latin American countries. It remains unclear how quickly some consortium members such as Uber and Spotify will use the currency, with some stating they would wait to see how it was received after its launch, before investing in use cases.
Serendipity Capital 2020 December 6th, 2020 WEEKLY NEWS UPDATE
Research of the Week
Libra / Diem White Paper
Note to Readers: On December 1, 2020, the Libra Association was renamed to Diem Association. This white paper, originally published by the Libra Association in June 2019 and then re-issued as a stand-alone update in April 2020, replaces previous versions published by the Association. Supporting technical papers published by the Libra Association in June 2019, have either been edited or retired. Features of the project as implemented may differ based on regulatory approvals or other considerations, and may evolve over time.
Serendipity Capital 2020