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Olaf Scholz: Facebook’s Crypto Diem Is a “Wolf in Sheep’s Clothing”

Olaf Scholz: Facebook's Crypto Diem Is a "Wolf in Sheep's Clothing"
  • German Finance Minister Olaf Scholz calls Facebook’s crypto Diem a “wolf in sheep’s clothing”.
  • Germany and Europe cannot and will not accept Diem’s entry into the market.
  • Facebook set to launch the digital coin in 2021.

Olaf Scholz, German’s Finance Minister, claims that Facebook’s rebranded cryptocurrency Diem, formerly known as Libra, is a “wolf in sheep’s clothing”. Furthermore, relaunching Libra under its new name of Diem is just a cosmetic change.

The statement follows a video conference of Group of Seven (G7) finance ministers at which digital currencies were discussed. Initially, finance ministers and central bankers from the G7 advanced economies strongly supported the need to regulate cryptocurrencies.

Speaking at a virtual conference in Berlin, Scholz noted that a wolf in sheep’s clothing is still a wolf. Apparently, this refers to Facebook’s crypto Diem.

It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.

It requires more than renaming Facebook’s cryptocurrency to address the concerns regulators have about authorizing its launch in Germany and Europe. “We must do everything possible to make sure the currency monopoly remains in the hands of states,” added Scholz.

Facebook Rebrands Its Libra Cryptocurrency

Social media giant Facebook has renamed its cryptocurrency Libra to Diem. Furthermore, Facebook’s Libra currency is set to launch as a single coin backed one-for-one by the dollar in January 2021.

The Libra Association now known as Diem Association is waiting to receive regulatory approval to operate as a payment service. Currently, approval is pending from the Swiss Financial Market Supervisory Authority (Finma).

David Marcus, the head of Facebook Financial, or F2, says he hopes regulators will give the company the “benefit of the doubt”. Also, Facebook renamed and rebranded its digital wallet from Calibra to Novi.

Group of Seven (G7) Discussions on Cryptocurrencies

The Group of Seven recently hosted the 12th G7 gathering virtually chaired by US Treasury Secretary Steven Mnuchin. Finance officials discussed digital assets and national authorities’ work to prevent crypto use for malign purposes and illicit activities.

Additionally, G7 officials reiterated their support for a G7 joint statement on digital payment in October. It said digital payments could improve access to financial services and cut inefficiencies and costs but should be “appropriately supervised and regulated.”

A devoted news specialist who is passionate about the blockchain and crypto industry. She writes news and feature articles based on the latest developments in the market. She is always updated and on the go.