The Cryptocurrency Called Libra

In June 2019, Facebook announced plans for a new digital currency called Libra and a related digital wallet originally known as Calibra. The project was presented as a way to make sending and receiving money more accessible through digital payments and blockchain-based technology.

However, Libra never launched as originally proposed. After extensive regulatory scrutiny and changes to the project structure, Libra was renamed Diem in December 2020. Facebook’s Calibra digital wallet was also renamed Novi. In January 2022, the Diem Association announced the sale of its intellectual property and other payment-network assets to Silvergate. Meta’s Novi pilot later ended on September 1, 2022.

Understanding the history of Libra, Diem and Novi remains useful because the project raised important questions that continue to affect stablecoins and digital payment products today: who controls the currency, what assets support its value, how user information is protected, how redemptions work, and whether financial regulators consider the system safe for consumers.

Key Insights

• Facebook announced Libra and the Calibra wallet in June 2019 as part of a proposed global digital payment system.
• Calibra was renamed Novi in May 2020, and Libra was renamed Diem in December 2020.
• The proposed Libra/Diem currency did not launch for general consumer use as originally envisioned.
• The Diem Association sold its intellectual property and payment-network assets to Silvergate in January 2022.
• Meta operated a limited Novi wallet pilot, but the pilot ended on September 1, 2022.
• The project remains a useful case study in stablecoin regulation, reserve backing, privacy, financial inclusion and technology-company involvement in payments.

What Was Libra?

Libra was a proposed digital currency project initially announced by Facebook in 2019. Unlike cryptocurrencies such as Bitcoin, which may experience significant price volatility and are not backed by a traditional reserve of assets, Libra was proposed as a currency supported by a reserve intended to help maintain a more stable value.

The original idea was to support low-cost digital payments, including person-to-person transfers and potentially cross-border transactions. Facebook described the project as a way to help make financial services more accessible, particularly for people who did not have easy access to traditional banking services.

Libra was not intended to be managed solely by Facebook. The project was associated with an independent organization originally called the Libra Association, which included participating companies and nonprofit organizations. However, Facebook’s scale, user data practices and role in developing the wallet attracted significant attention from regulators and policymakers.

What Was Calibra?

Calibra was the digital wallet Facebook originally planned to develop for sending and holding Libra digital currency. The company announced that the wallet was intended to be available as a standalone app and integrated into services such as Messenger and WhatsApp.

In May 2020, Facebook renamed Calibra as Novi. At that point, the wallet remained connected to the broader goal of enabling digital payments, although the proposed currency project was already facing significant regulatory and commercial challenges.

Why Was Libra Renamed Diem?

In December 2020, Libra changed its name to Diem. The Libra Association became the Diem Association, while Facebook’s wallet product continued under the Novi name.

The renamed project represented an effort to move away from some of the controversy attached to the original Libra proposal and present a more compliance-focused approach to digital payments. However, changing the brand did not remove the central issues regulators had raised about financial stability, consumer protection, money laundering controls, privacy, reserve management and the influence of a large technology company in the payments system.

Why Did Libra and Diem Face Regulatory Scrutiny?

A digital currency associated with a platform serving billions of users could potentially grow very quickly. That possibility led policymakers and regulators to question how the system would affect consumers, financial markets and national payment systems.

Key concerns included:

• Reserve backing: Regulators wanted clarity about what assets would support the currency and how holders could redeem their funds.
• Financial stability: A widely used private digital currency could potentially affect traditional banking, payments and monetary systems.
• Consumer protection: Users would need clear information about fees, disputes, fraud, mistaken payments, account access and potential losses.
• Privacy: Facebook’s involvement raised concerns about whether payment information could be connected with social or advertising data.
• Anti-money laundering compliance: Any payment network operating across borders would need controls designed to prevent illegal activity.
• Governance: Regulators and users needed to understand which entities controlled the network and how decisions would be made.

These concerns were not limited to Libra. Stablecoins and digital payment products continue to be evaluated in light of reserve quality, redemption rights, operational risk, privacy protections, regulatory oversight and consumer disclosures.

Did Libra Ever Launch?

No. Libra did not launch as the widely available global digital currency originally described in the 2019 announcement. Although the project was renamed Diem and its structure evolved, consumers were not ultimately able to use a general-purpose Libra or Diem currency through Facebook services as initially proposed.

In January 2022, the Diem Association announced that it had sold its intellectual property and other assets related to operating the Diem Payment Network to Silvergate. The sale effectively ended the Diem Association’s effort to launch the project under its ownership.

What Happened to Novi?

Novi was Meta’s digital wallet project, originally introduced as Calibra. Meta later conducted a limited Novi pilot that allowed eligible users in selected markets to send and receive money using a digital payment system.

The Novi pilot did not use a publicly launched Diem currency. The pilot eventually ended, and Meta stated that Novi stopped operating on September 1, 2022.

As a result, consumers cannot currently sign up for a Meta Novi wallet or buy and use a Facebook-backed Libra or Diem currency through the originally proposed system.

Libra’s Proposed Reserve Structure

One of the features intended to distinguish Libra from more volatile cryptocurrencies was its proposed reserve backing. The project was designed around the idea that the digital currency would be supported by real financial assets rather than relying only on market demand.

In theory, reserve-backed digital currencies may be less volatile than unbacked cryptoassets. However, the word “stablecoin” does not guarantee safety. The stability of any digital token depends on factors such as:

• Which assets are held in reserve
• Whether the reserve is independently verified
• Whether users can redeem tokens for traditional currency
• Whether withdrawals can be suspended or delayed
• Which company or institution controls customer funds
• What legal protections apply if the issuer fails
• Whether the product is regulated in the user’s location

Privacy and Security Concerns

Privacy was one of the most significant public concerns surrounding Libra and Novi. A payments system connected with a major technology platform raised questions about how financial information would be collected, protected and potentially separated from other user data.

Before using any digital wallet, cryptocurrency exchange or stablecoin platform, consumers should review:

• What identity information the provider collects
• Whether transaction data may be shared with affiliates or third parties
• How accounts are protected from unauthorized access
• What happens after fraud, mistaken payments or stolen credentials
• Whether funds are protected if the provider fails
• How to withdraw or redeem funds
• Whether customer support is available when a transaction goes wrong

Digital payments can be convenient, but convenience does not eliminate financial risk, fraud risk, operational risk or privacy concerns.

What Libra Teaches Consumers About Stablecoins

Although Libra and Diem did not reach consumers as originally proposed, the project illustrates why consumers should examine stablecoin products carefully before using them to store or transfer money.

Before buying or using a stablecoin, consider asking:

• Who issues the token?
• What asset is the token intended to track?
• What backs the token’s value?
• Are reserve reports or attestations publicly available?
• Can ordinary users redeem the token directly for traditional currency?
• What fees apply when buying, transferring or redeeming it?
• Is the provider licensed or regulated where you live?
• What happens if the token loses its expected value?
• What happens if the wallet provider, exchange or issuer becomes insolvent?

Stablecoins may be designed to maintain a relatively stable value, but they should not automatically be treated like insured bank deposits or risk-free cash equivalents.

Digital Wallet Safety Tips

Consumers considering digital payment or cryptocurrency wallet services should take basic security precautions, including:

• Use strong, unique passwords for financial accounts.
• Enable multi-factor authentication when available.
• Verify website addresses and avoid wallet links sent through unexpected messages.
• Never share recovery phrases, one-time security codes or account passwords.
• Understand whether transactions can be reversed before sending funds.
• Start with limited amounts when trying a new service.
• Keep emergency savings needed for bills in an accessible, appropriate account rather than relying on speculative or unfamiliar digital assets.
• Review consumer warnings and regulatory information before using an unfamiliar crypto product.

Timeline: From Libra to Diem and Novi

Date	Development
June 2019	Facebook announced Libra and its planned Calibra digital wallet.
May 2020	Calibra was renamed Novi.
December 2020	Libra was renamed Diem.
January 2022	The Diem Association announced the sale of its intellectual property and payment-network assets to Silvergate.
September 2022	Meta’s Novi pilot ended.

Frequently Asked Questions

What was Libra?

Libra was a digital currency project announced by Facebook in 2019. It was intended to support digital payments and transfers through a reserve-backed cryptocurrency system overseen by an association of participating organizations.

Is Libra still available?

No. Libra did not launch as originally planned. It was renamed Diem in 2020, and the Diem Association sold its related intellectual property and payment-network assets to Silvergate in January 2022.

What was Diem?

Diem was the renamed version of the Libra digital currency project. The renamed project continued to focus on digital payments and stablecoin-related technology before its assets were sold in 2022.

What was Calibra?

Calibra was the original name of Facebook’s proposed digital wallet for Libra. It was renamed Novi in May 2020.

Can I use Novi today?

No. Meta’s Novi pilot ended on September 1, 2022, and the service is no longer available for users to send or hold funds through the pilot.

Was Libra the same as Bitcoin?

No. Bitcoin operates as a decentralized cryptoasset whose market value can change significantly. Libra was proposed as a reserve-backed digital currency intended to maintain a more stable value for payments.

Did Libra guarantee safe or low-cost payments?

No. Libra was a proposal that did not ultimately launch for general consumer use. Any digital payment or stablecoin product should be evaluated based on current disclosures, regulation, reserve backing, fees, redemption rights, privacy protections and operational risks.

Are stablecoins risk-free?

No. Stablecoins can involve risks related to reserve assets, issuer failure, redemption limits, wallet security, exchange failures, regulation, fraud, operational interruptions and the possibility that a token may not maintain its intended value.

Important: This article is provided for general educational purposes only and does not constitute financial, investment, cryptocurrency, legal or tax advice. Libra and Diem are historical projects that did not launch for general consumer use as originally proposed. Digital assets and payment services can involve significant financial, fraud, privacy, cybersecurity and regulatory risks. Review current official disclosures and consider qualified advice before using any digital asset product.