The Diem Association has just announced that its wholly-owned subsidiary Diem Networks US partnered up with Silvergate Capital Corporation.
From then on, Silvergate Bank (“Silvergate”) will be the exclusive issuer of the Diem USD stablecoin. Diem will also be shifting its primary operations from Switzerland to the United States.
By shifting its main operations to the US, it would be a lot easier for Diem to issue the Diem USD stablecoin. This shift is aligned with Diem’s plans to advance the digital currency regulatory environment in the US.
A Swiss Financial Markets Authority (FINMA) license is not required for this new model. For that reason, Diem cancels its application for a payment system license granted by the FINMA.
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 Levey, CEO of Diem
Diem has developed a blockchain-based payment system that can support financial inclusion and responsible financial services innovation. Besides issuing Diem USD stablecoin, Silvergate will also be managing the DIem USD reserve.
Diem Networks US will be operating the Diem Payment Network (DPN) — a permissioned blockchain-based payment system that eases the real-time transfer of Diem stablecoin occurring between approved network participants.