Should Central Banks Worry About Facebook's Diem and Alibaba's Alipay?

Abstract: Alibaba — an e-commerce platform in China similar to Amazon — has created its own payment system (Alipay) to provide currency-like services: facilitating transactions, supporting peer-to-peer transfers and paying interest. Platforms like Facebook and Amazon are also researching creating their own digital currencies, but so far they have relied primarily on existing payment methods. What drives platforms to develop their own digital currency rather than use existing cash and card options? And should central banks and financial regulators worry about platforms issuing their own currency?

Keywords: Digital Currency; Payment;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2021-05

Volume: 21

Issue: 17