Facebook’s Digital Currency Diem to Be Launched in US
Diem Association, a Facebook-affiliated digital currency focused organization, has formally declared the launch of the Diem USD (DUSD), earlier referred to as Libra, in the crypto domain.
Since legislators and regulatory organizations labeled the USD-pegged stablecoin as a danger to the current financial network, it has faced a slew of problems. The company’s operational country has been changed from Switzerland to the US as part of the rollout.
“Diem is planning to launch the payment system from the USA in the first phase because initially, the project will focus on the USA as its target market.”
Diem Network US, a subsidiary of the Diem Association, has announced that it will operate a blockchain technology based payment platform in order to facilitate the real-time transmission of Diem USD. Furthermore, the firm will also enroll with the Financial Crime Enforcement Network of the US Department of the Treasury.
The Diem Association has also entered into ollaboration with Silvergate, a state-chartered bank headquartered in California, to help sell the Diem USD. Silvergate will be in charge of the DUSD reserve as well.
2/4 Diem is simplifying its plans for a Diem USD stablecoin issuance by moving its main operations to the US, bringing the project into the US regulatory perimeter. Diem will run its blockchain-based payment system from the US.
— Diem Association (@DiemAssociation) May 12, 2021
Stuart Levey, CEO of the Association 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.”
The Diem Payment Network would initially run as a permissioned network, with only licensed members being able to transact.The origin of Facebook’s digital currency can indeed be traced all the way back to 2019, when the social media behemoth revealed its plans to expand outside social media into e-commerce and international payment.
The digital currency was supposed to be secured by a variety of fiat currencies and short-term government debt. Nevertheless, their strategy to provide financial services to individuals and drive transactions involving global customers and companies ran into many regulatory roadblocks.
Notably, in 2020, the management agreed to abandon its intention to secure the asset with major currencies and government bonds and seek Swiss regulatory endorsement instead. To gain regulatory clearance, they rebranded to Diem and transitioned to a single dollar digital currency in December 2020. The Diem payment system’s digital wallet is still Novi.