Diem partnered with Silvergate, the California-state charted bank, in order to launch a new stablecoin in the US as we can see in our latest Diem news today.
The facebook-backed crypto project, the Diem Association, partnered with crypto-friendly bank Silvergate to launch a new stablecoin project pegged to the United States dollar. Diem partnered with Silvergate as per the announcement, to bring a new model of its upcoming stablecoin and relocated its main operations from Switzerland to the United States and it withdrew the application for payment system licenses from the Swiss Financial Market Authority.
The association comprises 26 financial companies including NASDAQ-listed crypto exchange Coinbase which is now planning to move ahead with the USD stabelcoin plans through the Silvergate Bank which is set to be the issuer of the DIEM USD and manage the USD reserve. Diem Networks which is Diem’s wholly-owned subsidiary will run the Diem Payment Network which is a permissioned blockchain-based payment system to facilitate Diem stablecoin transactions.
While Silvergate is a California state-chartered bank, it is also a member of the Federal Reserve and now it is seeking to register as a money services business with the US Department of the Treasury Financial Crimes Enforcement Network as per the announcement. CEO Alan Lane noted:
We believe in the future of U.S. dollar-backed stablecoins and their potential to transform existing payment systems. We’re inspired by Diem’s technology and commitment to building a regulatory compliant payment system that offers a safe and secure way to move money.”
The Diem CEO Stuart Levey noted:
“While our plans take the project fully within the U.S. regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland.”
The Diem Association didn’t respond immediately to the request for comment. Facebook released a white paper for Libra in 2019 and planned to peg the currency to fiat currencies including the US dollar, the Japanese Yen, and the Euro. But due to the regulatory pushback, the Facebook-backed Libra Association was struggling to launch the stabelcoin and rebranded to the Diem Association in the apparent new effort to launch the digital currency. The news came right after Facebook CEO Mark Zuckerberg hinted to a BTC holder earlier this week that the two pets he has were named Bitcoin and Max.
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