The organization said on Wednesday that the digital currency group Diem Association (formerly known as Facebook’s Libra project) plans to launch a US dollar stablecoin because it will reduce its global ambitions and focus on the United States.
The association is composed of 26 financial companies and non-profit organizations, and said that the association moved its main business from Switzerland to the United States and withdrew its payment system license application to the Swiss financial regulator.
Diem Networks US, a division of the Deim Association, will operate a blockchain-based payment system that allows real-time transfer of Diem stablecoins and will be registered as a money service business in the Financial Crime Enforcement Network Organization of the US Department of the Treasury. Say.
Stable currency is a digital currency linked to legal tender. The California-based Silver Gate Bank will issue the Diem USD stablecoin and manage the Diem USD reserve. Diem stated that it will launch a pilot program for the stablecoin, but did not disclose when.
The association said: “We are committed to providing consumers and businesses with a secure payment system to make payments faster and cheaper.”
The Swiss Financial Market Supervisory Authority confirmed in a statement that Diem had decided to withdraw its payment permit application.
It said: “Diem plans to start the payment system from the United States in the first phase, because initially the project will focus on the United States as its target market.”
Facebook first announced plans for Libra in June 2019 as part of its efforts to expand from social networks to e-commerce and global payments. It said that Libra will work with partners such as payment companies and credit card companies to create digital tokens backed by multiple currencies and short-term government debt. The social media giant expressed the hope that Libra can promote transactions between consumers and businesses around the world and provide financial services to more people. But the project was immediately strongly opposed by global policy makers, who feared that the project might weaken their control of the currency system, cause crime and damage users’ privacy.
In April 2020, Libra and its partners abandoned their plans to hold a basket of currencies and sovereign debt in favor of stablecoins backed by major currencies, and sought approval from Swiss regulators. In December last year, Libra was renamed Diem to regain regulatory approval, and its scope was further reduced to digital coins backed by a single dollar.
Currently, Facebook’s digital wallet Novi is one of Diem’s 26 members and a handful of investors.
Thomson Reuters 2021 ©