The Diem Association, the entity handling Facebook’s stablecoin project, has announced a partnership with its subsidiary Diem Networks U.S. and Silvergate Capital Corporation. As a result of the partnership, Silvergate Bank will become the exclusive issuer of the Diem USD stablecoin, and the Diem Association will also move to the U.S. from Switzerland. The Diem Association is building Facebook’s much-critiqued basket of stablecoins that both the crypto industry and incumbent authorities and institutions are skeptical of.
Deim Association moves from Switzerland to the U.S.
Diem Association runs a permissioned blockchain-based payments system, which allows real-time transfer of the stablecoins. The press release noted that the partnership is an important early step for a Diem USD pilot program. Stuart Levey, chief executive officer of Diem, said, “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…We look forward to working with Silvergate to realize this shared vision.”
Diem will withdraw its application for a payments license system from Swiss authorities.
Diem Association’s move from Switzerland to the United States is consistent with “Diem’s initial strategic focus” on the U.S. and is reflective of the changing regulatory environment in the country. Consequently, Diem will withdraw its application for a payments license system from Swiss authorities. For a long time, the Diem project had gone quiet, and not much was known about how it was developing. The project received a great deal of scrutiny when it was first announced and soon after received even more from government figures across the world. It is now preparing for its first pilot.