Facebook-backed Diem Join Hands With Silvergate Bank to Issue USD Stablecoin - TCR
Diem, popularly known as Libra earlier, is moving its operations to the U.S. from Switzerland. The Diem Association has partnered with Silvergate Bank to launch U.S. dollar stablecoin. This will be the first pilot project to be launched soon in the U.S.
- The Facebook-backed coin is moving its operations from Switzerland to the U.S
- The business will be registered as the money service business with FinCEN
- Silvergate Exchange Network will provide support for stablecoin transactions
Diem, which was once known as the Libra, has partnered with Silvergate Bank to launch a U.S. dollar stablecoin. The Facebook-backed coin is moving its operations from Switzerland to the U.S. The Diem Association has a subsidiary, Diem Networks U.S., which will run its payment network.
The business will be registered as the money service business with the Financial Crimes Enforcement Networks (FinCEN). Under the partnership, Silvergate will be issuing the Diem USD stablecoin. The bank will only manage the reserve backing the token.
As per the announcement that was made on Wednesday, the approved participants can do the transaction via DPN, one of the permissioned networks. Silvergate has its own payments network known as the Silvergate Exchange Network, which supports stablecoin transactions.
According to the press release issued, Diem will now be withdrawing its application from the Swiss Financial Markets Authority license since the operations are moving to the U.S. Stuart Levey, Diem CEO, believes in a safe payment system for consumers and businesses. The payment system should be cheap, quicker, and take advantage of blockchain technology to benefit the financial system.
The move by Diem is seen as the departure from the Libra Association, which Facebook formed in 2019. It was created as a partnership with buy-in from a host of different companies in Switzerland.
Diem is looking forward to launching FINMA approved products in December.
With this move, the then Libra Association has abandoned the original stablecoin. Many different fiat currencies supported the token. But this could not see the light of the day due to the regulatory issues. Many policymakers moved back and instead choosing to launch a set of tokens, each backed by a single fiat currency.
As per CNBC, the dollar stablecoin will be the first pilot project to be launched soon.
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