Our 10 Takeaways from the Facebook Libra announcement in June 2019 still seems about right. Over two years later and all we have is a name change from Libra to Diem. The message is still “it is happening” but patience is being strained.
In the meantime both Square & Twitter are making some big moves. Square & Twitter are very different businesses; Square is Fintech while Twitter is Media. The only thing they in common is that Jack Dorsey is CEO of both; actually that is a big deal.
First a quick reality check. The market cap of Facebook is $955bn and the combination of Square and Twitter is $152bn. Facebook is a behemoth in social media with a user base of 2.6 billion. If only a fraction of them adopt Diem, it will totally change cross border payments and remittances for the 1.7 billion unbanked (most of whom have mobile Internet access).
Diem has three components:
- Blockchain infrastructure layer (open source) capable of serving billions of users. Key to this is the Move programming language, which will get a lot of traction with developers (despite many negative technical reviews compared to Ethereum).
- Association for the governance of the payment system and Coin; this is currently in Switzerland, but relocation depends on Facebook’s delicate dance with regulators.
- Coin which is an asset backed stablecoin (initially USD only)
In Part 2 next week we look at Twitter’s moves in Bitcoin.
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