If the words of the German Finance Minister, Olaf Scholz, are anything to go by, then it appears Facebook may need more than a change of name to get its cryptocurrency out there. Scholz was quite vocal, stating in clear terms that Diem, formerly known as Libra, will not be allowed.
A wolf in sheep’s clothing remains a wolf. Germany and Europe cannot and will not accept Diem market entry as long as risks are not addressed in a regulatory manner.
Scholz’s remark is coming after a top executive of Facebook expressed hopes that the company would launch its cryptocurrency next year. However, it appears Diem will still face intense political backlash just like Libra.
It is however unclear whether Scholz’s stance extends to the wider cryptocurrency space. The finance minister who is running to become Germany’s Chancellor noted that the country would do everything possible to keep the currency monopoly in the hands of the states.
At the core of their innovation, blockchain and digital assets are trying to usurp this monopoly from centralized systems. While something like Diem may be under the control of the FED, its circulation as a digital asset will not be controlled by centralized financial institutions.