Facebook-backed digital currency project Diem said Wednesday it has withdrawn its application for a Swiss payment license to launch stablecoin.
May 13, 2021, | AtoZ Markets – Facebook has abandoned the Swiss license and will instead shift its operations to the United States. This was reported on the official website of the Swiss Financial Market Supervisory Authority (FINMA).
Facebook ditches plans for Swiss license for Diem
It is noted that Diem Association's Swiss subsidiary, Diem Networks, has withdrawn its application for a stablecoin license which was already at an advanced stage.
The reason for the withdrawal of the application is the desire of Diem to first launch a stablecoin on the US market as it has partnered with Silvergate, a California state-chartered bank, to issue the token.
Diem Association chief economist Jumanne Bersetche previously said the association plans to "roll out the various features and options" of the stablecoin in stages. Initially, it was assumed that Facebook will release several stablecoins at once pegged to different traditional currencies. Thus, the social network wanted to avoid suspicion of competition with central banks. However, what exactly caused such a sharp change in priorities remains unknown.
Earlier it was reported that Facebook will launch the stablecoin, which will be pegged to the US dollar, before the end of this year. However, then the time frame depended on obtaining a Swiss license. The company does not explain how the change in priorities will affect the timing of Facebook's digital currency release.
In the meantime, the leading US financial institutions are not interested in creating a digital version of the dollar. At least this is the conclusion reached by Bloomberg, citing industry representatives. The digital dollar is said to have the potential to fundamentally change the way Americans use money. According to Bloomberg, such a scenario will force banks to “lobby for a slowdown” in the development of the digital dollar.
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