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The Facebook-supported cryptocurrency project Diem (formerly Libra) is moving from Switzerland to the United States. In cooperation with Silvergate Bank, the association responsible for overseeing the development of two-way cryptocurrency announced a new launch plan.
The Diem Association announced Wednesday the partnership between Diem Networks USA Inc. and Silvergate Capital Corporation (NYSE: SI). Silvergate is a chartered bank in California and a member of the Federal Reserve. Diem Networks US is a wholly-owned subsidiary of the association. It plans to register as a money service business in the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury.
The 26-member association explained: “Under this partnership, Silvergate Bank (‘Silvergate’) will become the exclusive issuer of dual-currency USD stablecoins and will manage the Diem USD reserve,” adding:
The association also announced that it will shift its strategy to the United States, thereby shifting diem’s main business from Switzerland to the United States.
Diem Networks USA will run the Diem Payment Network (DPN), a permission-based blockchain-based payment system that can facilitate the real-time transfer of Diem stablecoins between approved network participants, and announce the details. The project is supported by the social media giant Facebook.
The association’s website details show that “anyone with an entry-level smartphone and data connection can access DPN”, adding: “The Diem token is an asset reserve consisting of cash or cash equivalents and very short-term government securities. For backing…”
Silvergate CEO Alan Lane commented:
We believe in the future of USD-backed stablecoins and their potential to change existing payment systems.
The Diem Association emphasized that the project will be fully operated within the scope of US supervision and therefore no longer requires a license from the Swiss Financial Markets Authority (FINMA). Therefore, its application to obtain a payment system license from the agent will be withdrawn.
What do you think about the transfer of the Diem project from Switzerland to the United States? Let us know in the comments section below.
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