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The Swiss banking world tries to reinvent itself

Facebook-backed digital currency project to leave Switzerland

Facebook-backed digital currency project formerly known as Libra, now called Diem is shifting operations from Switzerland to the US (file photo) Ap

The Facebook-backed digital currency project formerly known as Libra, says it is shifting operations from Switzerland to the US. Now called Diem, it has withdrawn its Swiss licence application.

This content was published on May 13, 2021 - 17:15
AP/Diem/FINMA/SWI swissinfo.ch/ilj

Geneva-based Diem said it planned to launch a cryptocurrency tied to the US dollar later this year.

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Diem said it was withdrawing its application for a payment system licence from the Swiss Financial Markets Authority FINMA. It has not yet been able to secure a licence from the Swiss financial oversight authorities.  

"The project has benefited greatly from [...] the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA [...]" Stuart Levey, Diem's CEO, was quoted as saying in a Tweet from the company on Thursday.

FINMA flagged up the withdrawal in a statementExternal link on Wednesday evening.

The Diem Association, which includes Facebook and 25 other companies, said it had entered a partnership with Silvergate Capital Corp. to issue a “stablecoin” backed by the US dollar. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities.

Facebook announced the Libra project in 2019, at the time envisioning it as a stablecoin based on a basket of national currencies. Since then, the effort has been scaled back considerably amid a regulatory and commercial backlash. It underwent a name change in December 2020.

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