- Diem has taken a step towards launching a U.S. stablecoin by announcing an issuing partner
- U.S.-based crypto bank Silvergate will issue the token and manage the reserves
- Diem rebranded from Libra, with Facebook’s former crypto project splitting into several stablecoins
The Diem Association, the company behind the Facebook controversial Libra cryptocurrency, has taken a step towards the release of a USD stablecoin by striking a partnership with crypto banking firm Silvergate. Diem also announced a “strategic shift” to the United States from Switzerland as it takes another step away from the roots that were planted when Libra was announced in 2019.
Diem Swaps Switzerland for the U.S.
Diem announced the Silvergate partnership in a press release yesterday, in which it claimed to have “built a blockchain-based payment system to support financial inclusion and responsible financial services innovation.” Silvergate, a New York-based company that offers banking solutions to cryptocurrency entities, will issue the stablecoin and manage its reserves.
In order to synchronize its launch, Diem will also transfer its main operations to the United States, abandoning its application for a payment system license from the Swiss Financial Markets Authority. Its first order of business in the U.S. will be to apply for a money transmitting license.
Libra Unrecognizable From Initial Design
Diem, which was renamed from the Libra Association in early December 2020, is the body that is overseeing what remains of the controversial Facebook cryptocurrency. Libra was announced in the summer of 2019 but the heavy criticism from governments and the possibility that it would be banned in some countries led to several design changes that effectively split the coin into several stablecoins, making it unrecognizable from its initial design.
It seems that the USD stablecoin will be the first manifestation of the new project, with other stablecoins possible if the first iteration is a success.