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Get Ready for Corporate Digital Currencies: Facebook failed, but another tech giant might soon pull it of


Abstract:

BUYING AND SELLING cryptocurrencies is a big business. Bitcoin, for exam-ple, processed US$3 trillion worth of transactions in 2021, more than double what American Expres...Show More

Abstract:

BUYING AND SELLING cryptocurrencies is a big business. Bitcoin, for exam-ple, processed US3trillionworthoftransactionsin2021,morethandoublewhatAmericanExpressdid.Butmostofthosetransactionswerejustforspeculation.Thefractionthatinvolvedbuyingactualstuff(goodsandservices)issosmallthatitshardtomeasure.WhatdevelopmentmightenablecryptocurrenciestodisplacetheU.S.dollarasthedominantmediumforexchangeintheUnitedStates?ItmightlookalotlikewhatFacebook(nowcalledMeta)proposedwithitsLibrastablecoin(whichmorphedintoDiem).AlthoughDiemsufferedafatalsetbackin2021whenU.S.TreasurySecretaryJanetYellenrefusedtosupportit,thatdoesntmeanthatarelatedmodelcouldntsucceed.Indeed,YellensrefusaltosupportDiemsuggeststhatshesawaprivatedigitalcurrencyasapotentiallyseriouscompetitortotheU.S.dollarandhencetotheU.S.Treasury.$Here I outline the rationale for such a private digital currency and explain how one might soon take off in the United States.
Published in: IEEE Spectrum ( Volume: 60, Issue: 12, December 2023)
Page(s): 34 - 39
Date of Publication: 08 December 2023

ISSN Information:


Corporate Cash

The idea of private digital currencies goes back to at least 1994, when the late Edward de Bono wrote of the “IBM dollar.” In de Bono's vision, “large man-ufacturing corporations” should create their own currencies, which could be used to buy their products. He saw this scheme chiefly as a way for companies to smooth out the volatility of sales and make their business more predictable.

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