Diem, Facebook’s rebranded Libra crypto project, to launch US dollar-pegged digital currency
- The US dollar stablecoins can be used in a blockchain-based payment system
- The original Libra project faced fierce opposition from global policymakers
Digital currency group Diem Association, formerly known as Facebook Inc’s Libra project, plans to launch a US dollar stablecoin as it scales back its global ambitions to focus on the United States, the group said on Wednesday.
The association, which comprises 26 financial firms and non-profits, said it was relocating its main operations from Switzerland to the United States and withdrawing its payment system licence application with the Swiss financial regulator.
Diem Networks US, a unit of the Deim Association, will run a blockchain-based payment system that allows real-time transfer of Diem stablecoins and will register as a money services business with the US Department of the Treasury’s Financial Crimes Enforcement Network, the group said.
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What are cryptocurrencies?
Stablecoins are digital currencies pegged to a fiat currency. California-based Silvergate Bank will issue the Diem USD stablecoin and manage the Diem USD reserve. Diem said it would launch a pilot of the stablecoin, but it did not say when.
“We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper,” the association said.
In a statement, the Swiss Financial Market Supervisory Authority confirmed Diem’s decision to withdraw its application for a payment licence.
“Diem is planning to launch the payment system from the USA in a first phase because initially the project will focus on the USA as its target market,” it said.