Facebook’s aim to launch a digital currency is looking at another roadblock as UK fintech Diem is considering to take the social media giant and its crypto partners to court over the recent rebranding of the crypto project, Sifted reported on Monday.
Previously known as Libra, the project was rebranded to Diem earlier this month, citing the new name ‘signals the project’s growing maturity and independence.’
UK-based fintech Diem is offering instant selling of consumer goods, similar to a digital pawnshop. Moreover, the startup offers a Diem debit card and marketing its services as the ‘Bank of Things’.
The fintech is yet to launch its full services, but it already had a soft launch in October.
“We were flabbergasted on 1st December to find that Facebook’s Libra Foundation had chosen to rebrand to Diem,” Diem founder and CEO, Geri Cupi, told the publication. “As a small startup, we are concerned that customer confusion resulting from Libra’s actions will significantly impact our growth.”
Starting with ‘Cease and Desist’
The report outlined that the nascent fintech had debated if it should move against Facebook and crypto partners. It has now decided to issue a cease and desist letter first. However, it is not clear if the startup would move against Facebook or the Geneva-based Diem Association.
“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’,” Diem Investor, Chris Adelsbach told Sifted.
Following a global regulatory backlash, the Swiss non-profit, consisting of Facebook and other tech and payment companies, is distancing from initial plans with a rebranding approach. Earlier this year, the association rebranded its wallet Caliba to Novi.
Interestingly, another startup bank sued Facebook earlier over the similarity of Calibra-logo to its own.
2021 Launch in the Pipeline
Meanwhile, the Diem Association is now gearing up to launch its digital currency as soon as January 2021.
Though media reports were floating around the launch date, Facebook Financial CEO, David Marcus, recently confirmed the company’s plan to launch both the wallet and the cryptocurrency next year.
“I hope that we get to participate with…Novi and Diem and the big changes of 2021, pending regulatory approvals where we need to obtain them,” Marcus said at the Singapore FinTech Festival.