The Facebook-backed currency withdrew plans for a Swiss license, saying it wants to focus on the U.S. market. It struck a key banking deal to do so.
Diem is shifting its main operations from Switzerland to the U.S., partnering with Silvergate Bank to issue a U.S. dollar stablecoin, and dropping plans for a Swiss payments license, it said in a statement on Wednesday. Swiss regulator Finma has spent much of the past year evaluating it, and coordinating regulatory views.
Project Changes
The move is the culmination of a nearly two-year foray in Switzerland, during which the project morphed from a digital currency, which immediately faced opposition from policymakers, to a payments system under Swiss regulatory oversight – and puzzled politicians.
«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,» Diem CEO Stuart Levey said.
Advanced Stage
The project formerly known as Libra said Silvergate will become the exclusive issuer of its U.S. dollar stablecoin, and manage Diem's currency reserves. U.S.-based Diem will operate its own permissioned blockchain-based payment system.
Its application to Finma one year ago, first as a stablecoin linked to a basket of cryptocurrencies and later scaled back to a payments system, had been at an advanced stage when Diem yanked it.
