The mission behind Diem is to enable a simple global payment system and financial infrastructure that empowers billions. We sat with Ran Goldi, CEO of First to discuss more about the future of the nascent stablecoin.
Adoption of new fintech technologies has grown a lot over the past year. The Covid-19 pandemic has led many businesses to embrace digital and innovative ways to make financial transactions. This evolution has included the use of stablecoins such as USDC, which has grown from US$500 million in circulation in January 2020 to US$11.3 billion in 2021.
This was one of the motivations behind the Diem Association’s creation of Diem, formerly known as Libra. The mission behind Diem is to enable a simple global payment system and financial infrastructure that empowers billions. Led by Facebook, Diem has the potential to reach billions of people and solve persistent issues like financial inclusion.
Meanwhile, national central banks are developing their own digital payment solutions called CBDCs –– a digital form of fiat money, backed by a monetary reserve such as gold or other foreign currencies. Each CBDC unit acts as a secure digital instrument equivalent and can be used as a way of payment, a store of value, and an official unit of account.
Currently many countries are pushing ahead with pilots and trials of central bank digital currencies, with 80% of countries already experimenting with CBDCs. To help with their public policy objectives, almost all central banks are actively researching the benefits and risks of offering a digital currency to the public.
Given all this and the objectives of both emerging digital payment methods, the question becomes: is there enough room for both Diem and CBDCs to co-exist going forward? We think so.
Read First’s CEO Ran Goldshtein’s thoughts on the future of digital payments and emerging fintech like Diem.