The report said that Facebook has been hit with threats of legal action due to the rebranding of the Libra stablecoin project to ‘Diem’ from a finance application of the same name.
It has been reported that Facebook announced its plan to rebrand Libra on December 1, with the firm claiming the new name would help the revamped project distance itself from the intense regulatory pushback faced by Libra when it was announced last year.
However, Chris Adelsbach, the co-founder of Diem and prominent European fintech investor, said that while he was intimidated by the prospect of entering a legal battle with Facebook, he had received legal advice instructing him to protect his brand.
He added:
“It wouldn’t have taken that much effort for Facebook to find out if there’s another Diem in financial services […] They obviously took the view that ‘we can just crush them, we’re Facebook.’”
Likewise, Geri Cupi, the CEO of Diem, said that his company was “flabbergasted” to learn of the Libra Association’s intention to rebrand itself as “Diem.”
He added:
“As a small startup, we are concerned that customer confusion resulting from Libra’s actions will significantly impact our growth.”
Moreover, Diem executed its soft launch in October and has since attracted half a million followers. The platform allows users to instantly sell possessions online and offers debit cards, with Sifted describing the app as “a digital pawnbroker of sorts.”
European fintech start-up Diem has threatened to sue Facebook should it proceed with renaming its Libra stablecoin, 'Diem'. https://t.co/7mw95MGasY — Cointelegraph (@Cointelegraph) December 8, 2020
It has been analyzed that Ripple recently faced a comparable lawsuit from the New Payments Platform Australia (NPPA), which alleged intellectual property infringements stemming from Ripple’s use of the brand “PayID” to describe its payment standard, despite the NPPA operating the “Pay ID” payments network in Australia from March 2017.
The case was resolved when Ripple registered a new trademark for “Paystring.” Facebook’s stablecoin ambitions appear to also be set for a legal showdown with global regulators.
Germany’s finance minister, Olaf Scholz, described the project as “a wolf in sheep’s clothing.”
Scholz emphasized that Germany’s lawmakers “will not accept its entry into the market” without Facebook demonstrating it has addressed the government’s regulatory concerns.
Thus, he added:
“We must do everything possible to make sure the currency monopoly remains in the hands of states.”
Source: Cointelegraph