In 2019, Facebook surprised everyone by announcing Libra, its digital currency project to facilitate financial transactions around the world. However, this project is not just that of the social network.
In fact, the management of this project is ensured by an association made up of several companies, including Facebook. The original project was very ambitious but quickly met opposition from many governments.
In addition to the fact that several companies have already left the association (e.g. Visa, eBay or Mastercard), many changes have been made compared to this original vision. For example, the Libra was originally intended to be a universal currency backed by multiple currencies.
Following opposition from regulators, the association now wants to create several stable coins that are backed by different currencies as well as one currency with multiple currencies. In addition, the name of the project was changed: Libra became Diem.
Program change: Diem moves to the USA
The Diem Association announced a new change today. While the association had already requested the green light from the Swiss authorities, this week announced the relocation of the project to the USA and the withdrawal of the application submitted in Switzerland.
“While our plans fully integrate the project into the American regulatory area and no longer require a license from FINMA (editor’s note, the Swiss regulatory authority), the project benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more Dozen other regulators from around the world have been asked by FINMA to investigate the project, ”says Stuart Levey, CEO of Diem.
In the US, Diem will work with Silvergate Bank. This will be the exclusive issuer of the Diem USD stablecoin and will also manage the reserve of this digital currency.
“We believe in the future of US dollar-backed stablecoins and their potential to transform existing payment systems,” said Alan Lane, Silvergate CEO. “We are inspired by Diem’s technology and their commitment to creating a regulatory payments system that provides a secure way to transfer funds. We are pleased to be at a point in the process where we can confidently announce this product and look forward to continuing our collaboration with Diem to bring it to market. “”
Facebook interest in all of this? When this blockchain-based payment system is finally implemented, the social network can take it over to facilitate money transfers through its various applications, especially messaging apps.
As a reminder, Facebook has already announced a digital wallet with which Internet users can use Diem. Originally this wallet was called Calibra. Then it was renamed Novi.
We can assume that the other companies that are members of the Diem Association also have similar interests, which urges them to support the project.