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Diem leaves Switzerland for US, announces plan to work with Silvergate on dollar-backed stablecoin

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On May 12, the Diem Association announced that it was abandoning its plans to register with Swiss financial watchdog FINMA and will be returning to the U.S.

In addition to the relocation, Diem says it will register with the U.S. Financial Crimes Enforcement Network (FinCEN) and will partner with Silvergate Bank as an issuer for its long-awaited U.S. dollar-backed stablecoin.

Diem did not specify where in the U.S. it seeks to set up shop and declined The Block’s request for comment when reached. CNBC reported that its new headquarters will be in Washington, D.C. Silvergate is based in California.

Despite the announcement of a partnership from Diem, Silvergate wrote that “[b]oth organizations are continuing to prioritize technological and operational readiness for a pilot, as the parties finalize the terms of a definitive agreement.”

Still, technological readiness hasn’t been the major factor standing in the way of launching. The move to the U.S. comes after two years of wrangling with U.S. regulatory concerns.

When Facebook initially announced Diem, then called Libra, back in early 2019, the Association’s base in Switzerland was one of a list of concerns that U.S. regulators had regarding the project’s intentions. Congress brought in first David Marcus and then Mark Zuckerberg in to testify on the project.

The Libra Association then moved to hire an executive team stocked by Treasury and Department of Homeland Security officials, underwent a rebrand, and downsized its ambitions from a global coin backed by a “basket of currencies” to the USD-backed stablecoin that forms the core of its proposed network.

More recently, Diem has continued to emphasize its desire to work with regulators, including partnering to form the technological backbone of central bank digital currencies.

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