Facebook’s digital currency venture “Diem” : the new frontier ... or a galaxy far, far away?

Rrustemi, Jahja (Haute école de gestion Fribourg (HEG-FR), HES-SO // Haute Ecole Spécialisée de Suisse Occidentale) ; Tuchschmid, Nils S. (Haute école de gestion Fribourg (HEG-FR), HES-SO // Haute Ecole Spécialisée de Suisse Occidentale)

This article focuses on Facebook's new digital currency, initially called "Libra" and renamed in December 2020 "Diem", that has been designed and proposed by the Diem Association (formerly the Libra Association). It briefly reflects on the historical meaning of money and currency, as well as "local currencies" viewed as precursors to the new "digital currencies" or "cryptocurrencies". The paper presents a general overview of the Diem project, particularly from the perspective of financial theory and practise. It looks specifically into Diem's business model and analyzes the project's planned and potential revenue streams, according to official documents published by the Diem Association. The research identifies potential obstacles and hurdles this digital currency would (since it has not happened yet) face on launch day and assesses whether the project is feasible in its current form. In the authors' view, although some early concerns were addressed in the Diem White Paper 2.0, the Diem project is only questionably ready for commercial launch in its current state. Speaking directly to the financial aspects of the Diem Association's project, the current regulatory hurdles and institutional pressures seem difficult to bypass without making some additional noticeable and meaningful changes to Diem.


Keywords:
Article Type:
scientifique
Faculty:
Economie et Services
School:
HEG-FR
Institute:
Aucun institut
Subject(s):
Economie/gestion
Date:
2020-12
Pagination:
12 p.
Published in:
Technology innovation management review
Numeration (vol. no.):
2020, vol. 10, no.12, pp. 19-30
DOI:
ISSN:
1927-0321
Appears in Collection:



 Record created 2021-03-05, last modified 2021-03-05

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