Facebook-backed cryptocurrency Diem is abandoning efforts to gain a payments licence from Swiss regulator Finma and instead switching its focus to the US
The Diem Association, which oversees development of the digital currency, has shifted its operations to the US and partnered with crypto-friendly US bank Silvergate, which will become the exclusive issuer of the Diem USD stablecoin.
The company says the formation of the partnership is an important step in preparation for a Diem USD pilot.
Stuart Levey, chief executive officer of Diem, comments: “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.”
Diem Networks US will register as a money services business with the US Department of the Treasury’s Financial Crimes Enforcement Network, ahead of plans to conduct a pilot for P2P transactions.
The move out of Europe can be seen as another setback for the controversial crypto project, which has faced stiff opposition from financial regulators.
“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,” says Levey.