Facebook-backed digital currency project Diem Association is relocating to the United States and has abandoned its plans for a Swiss payments license, it said in a statement. The company will now move to Washington, DC from Geneva, where it is currently based, CNBC reported. Back in 2019, Facebook brought various startups and financial services giants together to create a global digital currency called Libra. The project had to undergo several strategic changes given the lack of regulatory support it received in the past few years. After facing opposition from regulators around the world, many companies that were part of the project like Visa, Mastercard and PayPal decided to withdraw forcing the association to go through a complete makeover. Diem recently changed its strategy from a digital currency project, backed by a basket of multiple currencies, to a stablecoin model pegged to the US Dollar. While cryptocurrencies are priced based on their perceived value, stablecoins have an intrinsic value based on the underlying fiat-currency. So for instance, if 1 Bitcoin may be worth over $18,000 today, a stablecoin’s price is pegged more or less in line to the underlying currency. There are several US dollar denominated stablecoins in the crypto universe including Tether, USD Coin and Celo Dollar. Diem is withdrawing its application for a payments system license from the Swiss Financial Markets Authority (FINMA) and is partnering with Silvergate, a bank in the US, which will become the exclusive issuer of the Diem USD stablecoin and will manage the Diem…
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