Facebook’s Diem digital currency project is taking its operations to the U.S. and is partnering with a home bank to issue a stablecoin backed by the U.S. dollar, a major initial decline global perspective.
The project, which is supported by 26 companies and non-profit organizations, has left the application to the Swiss Financial Markets Supervisory Authority to act as a payment service and will instead apply for registration in the US Treasury as a service business.
The initiative was known as Libra, but was changed at the end of last year due to pressure global regulators concerned, in addition to threatening the stability of money and turning it into a money laundering site.
Some of its founding members – including PayPal, Mastercard, Vodafone and eBay – left similar fears and well-known concerns.
Initially, Diem wanted to create a synthetic coin backed by a basket of coins, before gradually reducing his focus to launch a single coin backed by dollars individually.
On Wednesday, Diem said it planned to launch a “blockchain-based payment system” that would facilitate the real-time transfer of the so-called “Diem stablecoins” transfer between network participants, which it said would move its headquarters from Switzerland to the U.S.
Silvergate, a San Francisco-based bank, would become the sole issuer of the stablecoin token and manage the reserve, he said.
“Our plans include the project within the U.S. regulatory perimeter and do not require a Finma license,” said Stuart Levey, CEO of Dieme and former legal chief of HSBC.
“We are committed to a secure payment system for consumers and businesses, making payments faster and cheaper, and using blockchain technology to deliver the benefits of the financial system to more people around the world,” he added.