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| Facebook is transferring its cryptocurrency project to the USA |
The Facebook-backed digital currency project said it had withdrawn its application for a Swiss payments license and moved its business to the United States.
The Diem association, which monitors the development of the cryptocurrency Diem, is submitting an application to the Swiss regulator, FINMA, for a license for the payment system.
Deem has now abandoned its plans for Swiss approval and its US subsidiary has teamed up with California charter bank Silvergate to issue the token.
While we intend to bring the project entirely within the scope of US regulations and no longer require a FINMA license, the project has benefited greatly from the extensive licensing process in Switzerland, said Stuart Levy, CEO of Diem, in a statement. It has constructive feedback from FINMA and others, as well as over twenty regulators around the world.
Deem said he plans to move his headquarters from Geneva to Washington, DC, where his American contingent is based.
After the announcement, FINMA said: Deem's requirements for a Swiss license are at an advanced stage, but the group is currently considering rolling out its payment system in the United States.
Facebook's vision for the digital currency was previously known as Libra and was vehemently rejected by regulators when it was first announced in June 2019.
Central bank officials and politicians fear that Facebook's digital currency could undermine national currencies such as the US dollar, which could lead to money laundering and a violation of user privacy.
Since then, the Facebook-backed organization has lost some of its major backers, including Visa, MasterCard, and PayPal.
Deem initially offered a global currency linked to a basket of major currencies. After receiving numerous government objections, the organization resorted to several stable coins backed by a different currency and a multi-currency currency.
Deem is currently planning to release Diem USD, which is a stable currency backed only by the US dollar.
Unlike Bitcoin, which uses blockchain technology and is not controlled by any organization, Diem technology is only applicable to a small number of participants such as Facebook and other members of the Diem Association.
Stablecoins are also designed to avoid the price fluctuations that occur with cryptocurrencies like Bitcoin.
Silvergate is the exclusive Diem USD issuer and manages the Diem USD Reserve in USD as it has become an ideal destination for cryptocurrency companies to be shunned by traditional lenders.
Deem plans to use a stable currency with the US dollar to launch a pilot program later this year. The pilot program is small and focuses on transactions between individual consumers.