The Diem Association, the consortium Facebook founded in 2019 that was looking to issue a new user-friendly stablecoin, is reportedly selling its technology to Silvergate Capital for $200 million.
The Californian bank, which is known for serving cryptocurrency companies, had last year reached a deal with Diem to issue some of its stablecoins.
The partnership between Silvergate and Diem would see the latter register as a money services business with the Financial Crimes Enforcement Network (FinCEN) while the former would be the issuer of the Diem USD stablecoin and manage the reserve backing of the token.
The U.S. Federal Reserve expressed concerns about the plan and wouldn’t guarantee it would approve it. The sale to Silvergate Bank represents an effort to squeeze some remaining value from the venture that was met with staunch opposition from regulators.
Source: https://www.cryptocompare.com/email-updates/daily/2022/jan/27/
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