Facebook-backed digital currency project the Diem Association has partnered with cryptocurrency-friendly bank Silvergate to launch a stablecoin pegged to the United States dollar. Diem announced Wednesday a new model of its upcoming stablecoin, relocating its main operations from Switzerland to the United States and withdrawing its application for a payment system license from the Swiss Financial Markets Authority. The association, which comprises 26 financial firms including Nasdaq-listed cryptocurrency exchange Coinbase, is now planning to move forward with its USD stablecoin plans through Silvergate Bank, which is set to be the issuer of the Diem USD and will manage the Diem …

Stablecoins present peculiar challenges to regulators. Although there is no single, agreed-upon definition of a stablecoin, the common denominator of the commonly used definitions is that stablecoins are designed to maintain a stable value in relation to a specified currency, asset or pool of such currencies/assets. They are contrasted with regular cryptocurrencies, which have no such stability mechanism and whose values tend to fluctuate, sometimes even substantially. Related: All risk, no gain? The vague definition of stablecoins is causing problems Stablecoins do not denote a uniform category but represent a variety of crypto instruments that can vary significantly in legal, …

Kevin Weil, the vice president of product at Facebook's digital wallet unit and one of the creators of the Libra token, now called Diem, will be leaving the social media giant. In a Twitter thread today, Weil said he would be leaving Facebook after almost three years to become the president of product and business at San Francisco-based space and analytics company, Planet Labs. He was one of the leaders of the social media firm’s digital wallet unit — once called Calibra, now Novi — in addition to being behind the Facebook-backed Libra token, now Diem. “Imagine instead if financial …

The Diem Association is progressing toward launch with a new technical upgrade that reportedly allows more financial institutions to connect with the payment network. Crypto security specialist Fireblocks and First Digital Asset Group, a Diem payment provider, announced Tuesday that they’ve developed a secure wallet and infrastructure that allows financial institutions to facilitate transactions on the Diem network. Founded in 2017, First Digital Asset Group enables merchants and other institutions to accept and process both Diem and stablecoin payments. The Diem network appears ready to begin onboarding new clients, provided they qualify as a Virtual Asset Service Provider, or VASP. …

China’s efforts to develop a centrally issued digital currency took a leap forward on Sunday as the state-owned Agricultural Bank of China launched the first digital yuan ATMs. Customers at select branches within the Shenzen region have reportedly begun spending and converting the digital yuan they received as part of China’s “red envelope” lottery, which saw $3 million worth of the new currency gifted to 100,000 local citizens. The ATMs reportedly allow the deposit and withdrawal of digital yuan via a smartphone app and allow users to convert cash and savings to and from the central bank digital currency. The …

In a tweet Monday evening, President Trump announced the departure of William Barr from the office of Attorney General. The announcement comes the same day that the Electoral College convened and confirmed Joe Biden's victory in the November election. Barr, long one of Trump's most loyal allies, will be stepping down on December 23. Under Barr's leadership, the Department of Justice has ramped up its actions in crypto, including high-profile criminal charges against BitMEX's leadership and the release of a new framework for crypto enforcement in October. The latter half of this year has also seen the largest seizures of …

The Chinese government is not seeking to replace existing fiat currencies with its own digital currency, according to a former governor of the People’s Bank of China, or PBoC. Zhou Xiaochuan, the president of the Chinese Finance Association and former PBoC governor, claimed that China’s digital yuan is not intended to replace global fiat currencies like the United States dollar and the euro, the South China Morning Post reported on Dec. 14. Also known as a digital currency electronic payment, or DCEP, China’s digital yuan is purely designed to transform cross-border trade and investment, Zhou said. Zhou contrasted China’s digital …

The United States Federal Trade Commission has filed a lawsuit against Facebook Inc., where it alleges that the corporation has been engaging in anti-competitive practices ever since acquiring a dominant global position at the turn of the 2010s. According to public case files released on Wednesday, the regulator believes that Facebook has systematically purchased or reproduced the features of any social media competitor that could have posed a threat to the company’s dominance. The lawsuit cites the 2012 purchase of Instagram and 2014 acquisition of WhatsApp as the most egregious examples of anti-competitive practices. According to internal and public communications …

Speaking at Singapore Fintech Festival, Circle CEO Jeremy Allaire said that "third-generation blockchain technology" would see digital currency "in the hands of hundreds of millions, if not billions of users." Allaire featured on a panel alongside the CEO of Facebook’s 'Diem' Association (formerly Libra Association) Stuart Levey, Coinbase CPO Surojit Chatterjee, and Soramitsu CEO Makoto Takemiya, to discuss the question: Can Digital Currencies Birth the Next Generation of World-Class Payment Systems?. Allaire argued that digital currencies are still very early in their development but are about to take a leap analogous to that from dial-up internet to broadband. “We’re right …

Global regulators should grant Facebook-backed cryptocurrency Diem “the benefit of the doubt” to greenlight its launch in 2021, a top executive at Facebook Financial said. David Marcus, the head of Facebook Financial, or F2, said that both cryptocurrency Diem and related crypto wallet Novi could be launched next year. Speaking at the Singapore Fintech Festival 2020 on Dec. 8, he stated that regulators should finally let Facebook move forward with its cryptocurrency: “I don’t think what we are asking for is just immediate trust. I think [...] what we’re asking for is at least to have the benefit of the …

Facebook has been hit with threats of legal action over its plan to rebrand the Libra stablecoin project to ‘Diem’ from a finance application of the same name. Facebook announced its plan to rebrand Libra on Dec. 1, with the firm claiming the new name would help the revamped project distance itself from the intense regulatory pushback faced by Libra when it was announced last year. Diem co-founder and prominent European fintech investor, Chris Adelsbach, told media outlet Sifted that while he was intimidated by the prospect of entering a legal battle with Facebook, he had received legal advice instructing …

Facebook’s Diem stablecoin, which recently changed its name from Libra, is still failing to impress German regulators. As reported by Reuters, German Finance Minister Olaf Scholz voiced his criticism of the project on Monday after a conference between G-7 finance ministers and central bank directors. Scholz called Facebook’s project “a wolf in sheep’s clothing,” highlighting that changing its name would not change its fundamentals. According to him, Facebook and the Diem Association have failed to adequately address its regulatory risks. Until that is done, the German government “will not accept its entry into the market.” Before renaming itself, Libra had …