Diem Association revealed a strategic collaboration with Silvergate Bank – a bank in the United States known for its friendliness to the crypto ecosystem. As a result, both organizations are planning to launch a new stablecoin that is pegged to the United States Dollar. In addition, Diem will move its operation to the United States from Switzerland.
A New Ground for Diem
The payment gateway built on Blockchain, Diem – created by Facebook, the renowned social media platform – has announced a fresh model for its imminent stablecoin. The Stablecoin project that goes by the name Libra formerly has teamed up with Silvergate, a pro-crypto bank, to guarantee the stability and balance of the new implementations.
The US bank, however, will then be the sole issuer and distributor of the Diem USD stablecoin and will also take care of the Diem USD reserve. On the other hand, the Diem Network in the US will be in charge of DON (Diem Payment Network), the payment system built on blockchain that will help in the creation of stablecoins within the verified participants.
The CEO of Diem, Stuart Levey, made his thoughts known on the mutual collaboration reached with the US bank. He said: “The bank is a well-known bank in the financial system and is the perfect partner for the development of Diem as work progresses on the payment system facilitated by blockchain for the protection of customers and enhancement of the integrity of the general financial system. Our hands are on deck to begin work with the bank and achieve our common goal.”
The CEO of the Silvergate Bank, Alan Lane, also noted that the entire team at the American bank is motivated for the journey with Diem on the upcoming project. He said: “We are more than inspired by the technology at the Diem’s and their immense commitment to building a payment system that is compliant to the regulations and is secure and safe for the transfer of money. We are also happy that we are at the stage of announcement of the project and are ready to work continually with Diem till the product hits the market.”
In another statement, the Diem Association revealed that the operations of the Association will be halted in Switzerland and will be moved to the United States. This might not be surprising as the bank is situated in California and is a verified member of the US Federal Reserve.