Facebook’s DIEM reveals new stablecoin plans and also plans a move to the United States where it will focus the most, as we can see in our latest cryptocurrency news today.
Diem, or previously known as Libra, has some new plans. Facebook’s Diem reveals the plans to launch a new stabelcoin project, stating earlier this year that it will be relocating the primary operations from Switzerland back to the USA and will withdraw the payment system license application from the financial regulators of Switzerland. They said:
“Diem is simplifying its plans for [its] USD stablecoin issuance by shifting its main operations from Switzerland to the United States.”
1/5 Exciting day @DiemAssociation! We are pleased to announce a partnership with @silvergatebank. @silvergatebank will become the exclusive issuer of the ≋USD stablecoin and will manage the ≋USD reserve.
— Christian Catalini (@ccatalini) May 12, 2021
The decision was later confirmed by the Swiss Financial Market Supervisory Authority. The stablecoins are digital currencies that are pegged to the fiat currency with Tether and USDC being the two main examples. California-based Silvergate Bank will become the main issuer of the Diem USD while managing the dollar reserves. Diem will launch a new subsidiary Diem Networks US Alongside Crypto Bank silver gate. In a strategic partnership, the two companies created the Diem Networks US that will run the Diem Payment network to facilitate the transactions of the stablecoins within the network. The chief executive officer at Diem Stuart Levy said:
“Silvergate is a leader in financial innovation and an ideal partner for Diem as we move forward with a blockchain-based payment system that protects consumers and enhances the integrity of the financial system. We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper, and takes advantage of blockchain technology to bring the benefits of the financial system to more people around the world. We look forward to working with Silvergate to realize this shared vision.”
Diem’s strategic shift to the United States came at a fast-evolving regulatory environment for crypto and blockchain technology. Some municipalities like Miami and Wisconsin embraced the recent innovation whereas some like the new chair of SEC Gary Gensler critiqued the autonomy of the industry. With the crypto ETFs and similar products being under the scrutiny of the SEC, it remains to be seen whether Diem’s decision to relocate the bank to the USA will be a good decision.