Testnet of Facebook's Much Vaunted Stablecoin Only Executes 6 Transactions per Second

The Facebook fronted stablecoin, Diem (formerly Libra)’s dismal testnet results undercut the assertion that the digital currency is a threat to global financial stability. This is the conclusion that can be deduced from a Diem blockchain explorer update which shows the network only processes an average of six transactions per second (tps), with the highest reported figure of 24 tps. The testnet for Diem has been live for more than 43 days at the time of writing.

The stablecoin performance suggests more still needs to be done before the expected launch in 2021, if the coin’s promoters still hope to upstage existing networks. According to a report, the Bitcoin (BTC) and Ethereum (ETH) networks already “execute close to four and 13 TPS, respectively.” The stablecoin’s initial figures-which if not improved on-undercuts Diem’s perceived appeal and the unsubstantiated claims that it poses a threat to the global financial system.

Many central banks and governments around the world expressed alarm when Facebook and its partners announced the impending launch of Libra in 2019. Since then, some central banks immediately began exploring the possibility of launching their own central bank digital currencies to forestall Libra. Since then, the company changed the stablecoin’s name and branding from Libra to the “Diem dollar.”

Yet based on these testnet results, Diem compares poorly against the payments giant, Visa which can execute “1,700 transactions each second.” Visa’s transaction throughput, which is 70x more than Diem’s highest reported tps, exposes the baseless fearmongering that followed Libra’s announcement.

Despite the many challenges, the determined Diem Association says it plans to “roll the testnet out and into the hands of potential users, potential customers, and potential companies.”