The Diem Association, Facebook’s proposed cryptocurrency system, has announced that it is moving its primary operations from Switzerland to the United States.
As a result, Diem is withdrawing its application for a payment system license from the Swiss Financial Markets Authority (FINMA), as a FINMA license is not required under the new model. Silvergate is a California state-chartered bank and a member of the Federal Reserve, and Diem Networks US will register as a money services business with the US Department of the Treasury’s Financial Crimes Enforcement Network.
Stuart Levey, chief executive officer of Diem, said “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.”
The Association also announced a partnership between its wholly-owned subsidiary, Diem Networks US, and Silvergate Capital Corporation. Under this partnership, Silvergate Bank will become the exclusive issuer of the Diem USD stablecoin.