Bank of England governor on Facebook-backed Diem: 'Where’s the business model?'

Quick Take

  • Bailey flipped a question about privacy issues relating to CBDCs around to focus instead on Diem.
  • The Bank of England is expected to publish a discussion paper on CBDCs in March.

Andrew Bailey, governor of the Bank of England, has publicly questioned the business model of stablecoin project Diem.

During questioning from MPs as part of a Treasury Committee panel on January 6, Bailey was asked by Conservative MP Steve Baker about privacy concerns relating to central bank digital currencies, or digital currencies that are backed in some fashion by central bank reserves. Bailey answered by turning the focus to Diem.

“One of the things that’s obviously been doing the rounds in the last year or so is this proposal that was called Libra, it’s now called Diem, which has been associated with Facebook,” he said, adding:

“And that’s caused quite a few reactions obviously. But one of the issues in that of course is where’s the business model in this thing? And is it actually in the privacy of information, in terms of access to information? Which would not be central banks of course, this would be private sector access to information.”