Facebook earnings call: Diem cryptocurrency launching “soon”
Facebook announced further plans for its launch of digital currency Diem and a fully integrated wallet, Novi.
- Mark Zuckerberg reinforces Facebook's intent to launch a stablecoin, Diem, for in-app payments as soon as possible.
- Diem continues to pivot, now launching as a US dollar-pegged coin, rather than a basket of various fiat currencies.
- Facebook revenue is up 46% YOY thanks to pandemic-related ad spending.
Facebook discussed its intent to launch a digital wallet for Bitcoin and its proposed digital currency Diem during the Q1, 2021 earnings announcement. Facebook CEO Mark Zuckerberg said "hopefully we'll be launching Novi and Diem soon" during an earnings Q&A session.
Zuckerberg described the Diem launch as "very important", saying that it was key to tie the Facebook ecosystem of payments to Diem and Novi so that the "economics all work out for developers".
He explained that with competing interests between regulators and the needs of developers, the blockchain technology will be better suited "initially as a centralized" blockchain for payments.
From there the permissioned blockchain system will become "more decentralized over time".
In June 2019, Facebook announced its control over the Diem Association (formerly Libra), overseeing a digital payments system powered by blockchain technology. Novi, a digital wallet for Diem, is expected to launch as a standalone application with later integration in Messenger and WhatsApp in late 2021.
The Diem website describes Diem as a stable coin US dollar-backed digital currency. The Facebook-controlled digital currency will be a "global stablecoin" that "will start as a single coin with a value of 1:1, the same value as the US dollar".
Zuckerberg added that after the digital currency is established "[m]ulti currencies (EUR, GBP) within the basket will be followed at a later time".
Diem has applied for a payment system operator licence with the Swiss Financial Market Supervisory Authority (FINMA), and Novi has applied for financial licences in the United States and certain other countries.
Facebook revenue grows despite pandemic
Revenue from Q1 reached $25.4 billion, which is a 45% increase year on year. That increase is despite a $1.7 billion drop in revenue from Facebook's Q4 2020 results.
During the most recent conference call on Q1 earnings, Facebook revealed that 200 million businesses use the social media app to reach Facebook users. Alongside that, Facebook counted more than 2.7 billion daily active users.
Marketplace, Facebook's local commerce and trading application within Facebook, attracted more than a billion users on a monthly basis
The Facebook (NASDAQ : FB) share price is up over 67% year on year according to TradingView.
Disclosure: The author owns a range of cryptocurrencies at the time of writing