The Facebook-led digital currency project Diem is shifting its operations to the US and will partner with a domestic bank to issue a US-dollar backed stablecoin, in a big downgrade from its initial global vision.
The project, which is supported by 26 businesses and non-profits, has also dropped its application to the Swiss Financial Market Supervisory Authority to operate as a payments service, and will instead apply to register as a money services business with the US Treasury.
The initiative was formerly known as Libra but rebranded at the end of last year as it came under pressure from global regulators worried that it could threaten monetary stability and become a hotbed for money laundering.
A number of its founding members — including PayPal, Mastercard, Vodafone and eBay — quit over similar fears and reputational concerns.
Initially, Diem sought to create a synthetic coin backed by a basket of…