Facebook-backed Diem to launch US stablecoin

The Diem Association has announced a new partnership with Silvergate Capital, which will become the exclusive issuer of the organisation’s stablecoin cryptocurrency in the United States.

Diem also revealed that the move is part of a strategic shift to the US, which means its primary operations will be moved from Switzerland to the United States.

Diem Networks US will run the Diem Payment Network (DPN), a permissioned blockchain-based payment system that facilitates the real-time transfer of Diem stablecoins among approved network participants.

Diem said that partnership represented an important step in preparation for a Diem USD pilot.

“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,” said Stuart Levey, chief executive officer of Diem. “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 realise this shared vision.”

The Association said that the shift away from Switzerland is part of its initial strategic focus on the US and reflects its consideration of the evolving digital currency regulatory environment in the country.

As a result, the organisation is withdrawing its application for a payment system license from the Swiss Financial Markets Authority (FINMA), as a FINMA license is not required under the new model.

“While our plans take the project fully within the US regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA to consider the project,” added Levey.

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