WASHINGTON— A Facebook Inc . -backed digital currency project is being revamped in a bid to address concerns among U.S. officials that it could be used for money laundering and other illicit purposes.
The project, initially known as Libra and renamed Diem last year, is moving to the U.S. after abandoning a bid to secure the imprimatur of regulators in Switzerland, its backers said Wednesday.
The Diem Association also announced a partnership with Silvergate Capital Corp . , a La Jolla, Calif.-based bank. The lender, which has for several years served crypto firms as a core part of its business, will issue the dollar-denominated stablecoins, Diem said. Stablecoin prices are often pegged at a one-to-one ratio to a stable asset, such as the U.S. dollar, to avoid the volatility of other cryptocurrencies.
Among the other changes, the association said its subsidiary, Diem Networks, would run all operations for the planned payment network as well as the digital stablecoin. It added that Diem Networks plans to register with the Treasury Department’s Financial Crimes Enforcement Network, its anti-money-laundering unit.