Note: I’m a board member of the Diem Association, and Novi is a member alongside 25 other organizations. I’m writing this with a focus on Novi and Facebook’s potential in the industry.
There has been a lot of conversation and debate in the US lately about stablecoins, crypto, and other digital assets. I’m encouraged to see the discussion gaining momentum, especially right now. Because it has never been more urgent to transform our broken payments infrastructure.
The systems we hav e today are costly, slow, and not interconnected. There are still about 1.7 billion people who are unbanked around the world, and even more who are underserved. Among them are 62 million Americans who are unbanked or underbanked — people left behind by the current system and stuck in the cash economy. Globally the state of play for cross-border payments is dramatically bad with an average cost to consumers, who can afford it the least, of 6.5% (more than double the Sustainable Development Goal of 3%) and end-to-end settlement times of three days on average.
The COVID-19 pandemic supercharged the expansion of the digital economy around the world. It sparked changes in how people buy, where they buy, and how they discover and interact with businesses. It prompted greater reliance by many families on money sent from overseas as a critical economic lifeline. And this trend is set to continue — the percentage of global digital transactions is expected to rise from 57% before COVID-19 to 67% by 2025. This all makes it more critical than ever for businesses and policy makers to move faster to help ensure people aren’t left behind.