Facebook-backed Diem could launch later this year, according to a CNBC report. The report, citing an anonymous source, said that the Diem Association, a non-profit organization based in Switzerland, is planning to launch a small-scale pilot later this year with a single “stablecoin” pegged to the US dollar.
CNBC also said that if Diem’s pilot does get launched this year, it will focus mainly on transactions between individual users and also allow them to buy goods and services.
According to the report, Facebook (FB) first proposed a universal digital currency, Libra, in 2019 as a universal currency that could be tied to different currencies including the Euro and the US dollar. However, FB faced strong opposition to this project from financial regulators around the world.
As a result, the organization supervising the Libra project, currently known as Diem, lost its backers including Mastercard (MA) and Visa (V), resulting in Diem "opting for multiple 'stablecoins' backed one-to-one by different government-backed currencies, as well as one multi-currency coin.” (See Facebook stock analysis on TipRanks)
Around a week ago, Cowen analyst John Blackledge raised the price target from $350 to $360 (18.9% upside) and reiterated a Buy on Facebook. Blackledge raised his estimates for FB after a first quarter digital advertising call indicated rising advertising revenues at FB and Instagram.
Shares of Facebook have gained 7.3% in the past month.
Overall, the Street is bullish on the stock with a Strong Buy consensus rating, based on 30 Buys and 4 Holds. The average analyst price target of $344.81 implies 13.9% upside potential from current levels.
According to the TipRanks Smart Score system, FB scores a 7 out of 10, indicating that the stock is likely to perform in line with market averages.
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