Facebook Diem is suffering under the shadow of its founder’s bad reputation, so much so it had to change its name. Initially, Diem launched in 2019 as Libra, and it was evident that Facebook was responsible for it.
Facebook co-founded the coin with the Libra Association Facebook’s troubling past with leaky data has gathered mistrust for the company. Many countries were looking for clearer steps to be taken by the Libra Association and media giant firm regarding data safety.
Even before launching the cryptocurrency, the online platform received eyebrow raises from politicians across Europe and the US. Major partners pulled support from what was known as Libra due to its ties with the social media player.
The Libra crypto is supposed to be stable digital money, pegged to a single dollar that does not fluctuate, unlike Bitcoin. Facebook’s stable coin agenda should have raised confidence, but instead, it was met with skepticism.
Facebook’s shaky past
The Facebook-Cambridge Analytica data scandal is still an event that sends shudders down people’s spines today. The scandal was an episode where millions of users’ data were gathered without their consent.
87 million people were used for advertising in elections. The media company was held accountable by a group called ‘Facebook You Owe Us,’ who filed a lawsuit against the company in late October this year to protect users.
Facebook has dabbled in digital currency before on a smaller scale. Before Facebook decided to play with the big sharks, it launched a virtual currency called Credits.
Credits were a way for gamers to make easy transactions. Once Facebook entered the big league and tried to establish a cryptocurrency for the world to use that was met with disapproval.
The world could not trust a company which already failed dismally before.
The lack of trust has left Diem no choice but to waiver ties with Facebook by dis-owning its former name. Diems currency will be called the Diem Dollar. The organization has put together a new leadership team consisting of Dahlia Malkhi, chief technology officer, Christy Clark, and chief of staff.
Other Diem team members include Steve Brunnel, chief legal officer, and Kiran Raj as executive vice president for growth, innovation, and deputy general counsel. Many attempts to resurrect the stable coins reputation have been made, yet international leaders will not buy into the reforms.
Germany’s finance minister, Olaf Sholz, dubbed the change “A wolf in sheep’s clothing.” He commented after the Group of Seven ( G7) meeting that Germany and Europe would not accept the use of Deim within its borders.
The main issue which Libra failed to address was regulatory risks. Officials do not believe the stablecoin has addressed the regulatory risks despite the fact the company has revamped its mission to cater to their needs.
No matter what changes the Diem company makes its reputation has already been scarred. Companies under-estimate how much weight a cryptocurrencies’ reputation carries.
Bitcoin is an example of a coin which in just 12 short years, has propelled in price simply because of selling the dream. The dream that Bitcoin delivers is that people’s data is kept private and secure.
Facebook has doomed Diem before it has even launched because it failed to make its customers feel safe and secure.