Digital Euro Association Blog

Novi is the new Facebook Pay

Nov 19, 2021 11:32:07 AM / by Enrique Titos posted in Diem, Digital Money, CBDC, Stablecoin, Novi, Facebook Pay

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I started writing about the disruption that blockchain and crypto assets would bring when Facebook first announced the intention to launch Libra in 2019 with a consortium of 28 companies to develop its distribution ecosystem. A lot has happened since then and at no point has Facebook given up on its ambitions in redefining the payments landscape.

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A Global Digital Currency to rule them all? A Monetary-financial View of the Facebook's Libra for the Euro Area

Jan 12, 2021 7:47:41 PM / by David Tercero-Lucas posted in Diem, Central Bank Digital Currency

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In this paper, the monetary-financial implications of two versions of Libra are analysed, i.e. Libra 1.0 and Libra 2.0. First, I briefly discuss how technological developments in monetary history have reshaped the payments landscape and how Libra is going to challenge the current bank-based ecosystem. Second, I identify some risks stemming from the current monetary-financial system and I review the Euro Area's regulatory framework to control these risks. Third, I assess how a wide acceptability of Libra's 1.0 and 2.0 could challenge the current monetary-financial structure and therefore the risks associated. Finally, I propose a Synthetic CBDC issuance, i.e., a narrow banking approach, to limit the new risk associated with the introduction of Libra 2.0.

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Libra — Concept and Policy Implications

Jul 2, 2020 12:56:37 PM / by Jonas Groß, Bernhard Herz, Jonathan Schiller posted in Diem

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Medium

The announcement of the Libra Association to issue a private global currency has triggered a heated debate about the concomitant advantages and risks. Proponents expect Libra to unfetter money from its “governmental chains” and liberalize and cheapen monetary transactions around the globe. Opponents argue that a private currency imposes unforeseeable risks for both individuals and the whole financial system. Furthermore, Libra could hamper monetary policies of national central banks. This paper contributes to the debate in two ways. First, we offer a comprehensive overview of the concept of Libra and its possible benefits and downsies to analyze its market potential. Second, we discuss potential implications that a private currency as Libra poses for monetary policy and financial regulation.

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