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Facebook-backed cryptocurrency project Diem, formerly Libra, is moving from Switzerland to the U.S. In collaboration with Silvergate Bank, the association, which oversees the development of the diem cryptocurrency, has unveiled a new launch plan.
The Diem Association announced Wednesday a partnership between Diem Networks U.S. and Silvergate Capital Corporation (NYSE: SI). Silvergate is a California state-chartered bank and a member of the Federal Reserve. Diem Networks U.S. is a wholly-owned subsidiary of the association. It plans to register as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
The 26-members association explained that “Under this partnership, Silvergate Bank (‘Silvergate’) will become the exclusive issuer of the diem USD stablecoin and will manage the Diem USD reserve,” adding:
The Association is also announcing a strategic shift to the United States, resulting in a move of diem’s primary operations from Switzerland to the United States.
Diem Networks U.S. 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, the announcement details. The project has the backing of social media giant Facebook.
The DPN “will be accessible to anyone with an entry-level smartphone and data connectivity,” the association’s website details, adding that “Diem Coins are backed by a reserve of assets made up of cash or cash equivalents and very short-term government securities.”
Silvergate CEO Alan Lane commented:
We believe in the future of U.S. dollar backed stablecoins and their potential to transform existing payment systems.
The Diem association emphasized that the project will operate fully within the U.S. regulatory perimeter so it no longer requires a license from the Swiss Financial Markets Authority (FINMA). Therefore, its application for a payment system license from the agency will be withdrawn.
