Diem claims one US regulator praised its stablecoin as it noted in the sale announcement, making comments right before it dies off so let’s read more in today’s latest altcoin news.

Diem or formerly known as Libra is officially dead. In an announcement on Monday, the Diem Association confirmed other reports that it will shut down and will sell off its assets to the crypto bank Silverage for $200 million. The announcement was quite bizarre for some especially because Diem claims one US regulator actually praised their idea for a stablecoin. A piece of the announcement read:

 “As we undertook this effort, we actively sought feedback from governments and regulators around the world, and the project evolved substantially and improved as a result. In the United States, a senior regulator informed us that Diem was the best-designed stablecoin project the US Government had seen.”

This is quite the claim considering the pushback from regulators which was seen as the main cause of the Diem closure but this is not the first time that Diem said this. In a public response to a letter of concern from Congress, Diem noted:

ADVERTISEMENT

 “Beyond financial crime compliance, we engaged extensively with an interagency regulatory team about the design of the project. As part of that review, we made adjustments to reflect feedback we received, and we were informed by a senior regulator that Diem is the best-designed stablecoin project that the U.S. government had seen.”

There is some evidence that the US government’s plan for stablecoins is to tamp down the industry by bringing the biggest stablecoin issuers under the control of bigger banks. Facebook’s announcement of libra back in 2019 was also a watershed that alerted the US government that stablecoins could rise. Diem’s sale announcement also praised the Biden administration recent report on stable coins which does come as a surprise:

 “We are gratified that the subsequent Report on Stablecoins issued by the President’s Working Group on Financial Markets validated many of Diem’s core design features. Those features address not only the risks related to the issuance of a stablecoin, but also the risks associated with transferring stablecoins between parties.”

However, Silvergate bought up the rest of Diem, and now it plans to launch its own stablecoin but it is unlikely It will use diem’s name. According to a researcher at the Yale Program on Financial Stability, Steven Kelly we can see that:

“My sense of that line is that they wanted it to be a nice hand-off for Silvergate. They didn’t want to say, ‘We are bailing on this because of all the regulatory concerns’ and leave Silvergate to answer to its own supervisors and investors. If they just said, ‘We can’t meet regulatory standards,’ that bank is going to face some questions.”

ADVERTISEMENT

DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]

Receive the latest Crypto Regulatory and Legal News via LinkedIn or Twitter:
Twitter
Visit Us
Follow Me
LinkedIn

Source: https://www.dcforecasts.com/altcoin-news/diem-claims-one-us-regulator-praised-its-stablecoin-report/