Friday, July 19, 2024

Facebook’s Diem Abandons Swiss Plans, Will Move to US

Diem, the Facebook-backed cryptocurrency formerly known as Libra, is abandoning its efforts to get licensed in Switzerland and will move to the US.

Diem is a widely anticipated crypto that has gained and lost support from major corporations during its planning and development stage. Some of the biggest names in tech and finance originally backed it before reversing course as a result of regulatory scrutiny.

Many jurisdictions were concerned about the prospect of Facebook — a company with a troubled reputation in the realm of data and privacy — being the primary backer of a cryptocurrency. To help address the issues, Facebook pivoted to making Diem a stable crypto, backed by a national currency.

The Diem Association had originally been trying to gain licensing approval with Switzerland’s FINMA watchdog. According to CNBC, however, the association has changed direction and will move to the US. The association has partnered with Silvergate, a California bank, to back Diem with the US dollar.

“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,” Stuart Levy, Diem’s CEO, said in a statement.

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