Facebook’s stablecoin project Diem has announced it is to launch a U.S. dollar pegged stablecoin, in the latest paring back of its international ambitions.
The project, formerly known as Libra, had been envisaging a worldwide roll-out for its stablecoin, which it had planned would be pegged to a weighted basket of international currencies. However, run-ins with regulators worldwide have resulted in several significant changes of direction in recent months, with the recent announcement the culmination of its reshaped ambitions ahead of launch.
The Diem Association, which runs the project, said it was moving its headquarters from Switzerland to the U.S., and would be withdrawing its application for a payment system license with the Swiss financial authorities.
Diem is now preparing to register as a money services business with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury.
A pilot launch of the stablecoin is being planned in connection with California’s Silvergate Bank, though Diem has yet to confirm when the rollout will take place.
“We are committed to a payment system that is safe for consumers and businesses, makes payments faster and cheaper,” according to Diem.
The Swiss Financial Market Supervisory Authority issued its own statement confirming Diem’s intentions to revoke its Swiss license application.
“Diem is planning to launch the payment system from the USA in a first phase because initially the project will focus on the USA as its target market.”
Plans for Facebook’s stablecoin, or Libra as it was then, were unveiled in June 2019, part of the company’s strategic ambition to expand into the global payments sector.
It had been hoped that Libra would allow for transactions between consumers, and consumers to businesses, as a form of digital payment native to the Facebook ecosystem.
The revised USD-only stablecoin strategy will now see Diem turn its focus to its domestic market in attempting to establish its foothold in the space.