<p>A once-ambitious Facebook-backed digital currency project — formerly known as Libra, now called Diem — is shifting operations from Switzerland to the U.S. and said it plans to launch a cryptocurrency tied to the U.S. dollar later this year.</p>
<p>As part of the move, Diem said it is also withdrawing its application for a payment system license from the Swiss Financial Markets Authority, which it has not been able to secure thus far. </p>
<p>The Diem Association, which includes Facebook and 25 other companies, said Wednesday has it entered a partnership with Silvergate Capital Corp. to issue a “stablecoin” backed by the U.S. dollar. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities. </p>
<p>As the name implies, stablecoins are designed to not fluctuate wildly in value. That’s in sharp contrast to cryptocurrencies like Bitcoin, whose value is not tied to a real-world currency and whose price has ranged between roughly $9,000 and $63,000 over the past year. </p>
<p>Facebook announced the <a href="https://apnews.com/article/bitcoin-business-technology-ca-state-wire-international-news-bf65691428d24af7b9fc1f0707d433b4">Libra project in 2019</a>, 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 regulatory and commercial backlash. It underwent a name change in December 2020. </p>
<p>Wednesday’s announcement represents a further scaling back as Diem shifts focus to the U.S. from its original ambitions to become a global currency for the unbanked around the world.</p>
