Facebook-Backed, Diem Association, Remains Persistent in US Stablecoin Launch Goals

Facebook’s ambitions for its Diem cryptocurrency have been scaled back once more, as the social media giant now intends to launch the stablecoin only in the US.

By
Robert D. Knight
on
May 13, 2021
Category:
BSC News

Introduction

The currency was initially intended to be a cryptocurrency backed by a basket of cryptocurrencies, but later became a US-pegged stablecoin named Diem launching from Switzerland.

As part of that process, Facebook had filed for a payments license from the Swiss Financial Market Supervisory Authority (FINMA). It was understood that Facebook was already at a late stage of negotiations with Swiss regulators, but now the company is switching its operations across the Atlantic with the help of US bank, Silvergate. The crypto-friendly institution is set to become the exclusive issuer of the Diem US dollar stablecoin.

Development Hell

Facebook’s currency has drawn the interest and ire of regulators and governments from around the world, perhaps more so in the US than anywhere else. The switch to the US signals another significant shift of strategy in a long line of changed plans and new directions. Facebook now intends to launch their US-only stablecoin in a market already saturated with dollar-pegged stablecoins which anyone can use anywhere in the world.

Despite the apparent competitive shortcomings of Diem in the shorter term, Facebook has a strong suite of social media sites it may be able to leverage to its advantage. The social network continues to doggedly stumble onwards in its continuing desire to launch some kind of crypto. In a statement on the latest developments, Stuart Levey, Chief Executive Officer of Diem said:

“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.”

Levey went on to add, 

“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.”

Concluding Thoughts

Source

The development cycle of Diem is one of the most convoluted and long-running in crypto. The project was beset with problems from the outset. A number of the founding members of the Libra/Diem association such as Mastercard, Visa, and PayPal have abandoned the project and the form of the currency has changed as well. Facebook and Diem will hope that they have got the formula right with this latest incarnation.

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Robert D. Knight

Robert D. Knight is an experienced journalist and copywriter who has been working in crypto for 4+ years. His bags are heavy and he also hodls some cryptocurrency.

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