The future of money between central bank digital currency (CBDC) and stablecoins. The Diem example
The future of money is digital – and which money will come out as the dominant and system-defining one will be decided in the competition between central bank digital currency (CBDC, that is, sovereign money, for example as a digital dollar, euro, pound,...) and private stablecoins from new financial corporations. The prototypical case in point is Diem, the modified successor plan to the stablecoin Libra initiated by Facebook in 2019. Whether between CBDC and stablecoins there will still be room for other types of money – especially bankmoney, or money market funds as a means of payment – is questionable.
Libra. Facebook’s plan for a global digital currency
In June 2019 the Facebook-initiated Libra Association presented a White Paper on its project of a private global currency and payment system to be launched in 2020, called Libra. It was conceived of as a currency based on a basket of international reserve currencies such as the US dollar, euro, yen, pound, and a few more. This met with strong opposition from the central banks and politicians concerned. They feared for the sovereignty and status of their currencies. The paper presented here makes an assessment of the Libra concept.