Launch of Facebook’s Diem moves closer through collaboration

Launch of Facebook’s Diem gets closer through cooperation

Through a cooperation between the financial service providers Fireblocks and First Digital Asset Group, financial institutions should be able to integrate the Diem Stablecoin more easily as a means of payment in the future. However, the platform is still awaiting regulatory approval.

The prestigious Diem project seems to have come one step closer to a release. Through the cooperation of crypto security service provider Fireblocks and Diem payment provider First Digital Asset Group, financial institutions should be able to process transactions more Bitcoin Trader easily via the Diem network in the future. This was announced by both companies in a press release. The collaboration is primarily intended to overcome the hurdles caused by the complexity of connecting and setting up with the Diem blockchain, so that companies can work more easily with the stablecoin. Fireblocks is laying the security foundation for this through its in-house wallet.

The service is to be available to all qualified virtual asset service providers (VASPs). As defined by the Financial Action Task Force (FATF), an international institution dedicated to the fight against money laundering and terrorist financing, a VASP is a:

Entity engaged in the exchange, transfer or custody of virtual assets.
FATF, 2019

The partnership between Fireblocks and First is intended to „accelerate the adoption of Diem payments“ and ensure that any capable financial institution can connect to the network, according to Michael Shaulov, CEO of Fireblocks. First CEO Ran Goldi added:

As trustees, wallets, exchanges, PSPs (payment service providers, ed.) and other VASPs prepare for the Diem network, we are excited to work with Fireblocks to deliver everything a VASP needs, from risk to on/off-chain communications to liquidation.
Ran Goldi, CEO First Digital Asset Group

Diem still under pressure

Even after its rebranding in December 2020, Diem continues to face massive criticism. For example, German Finance Minister Olaf Scholz (SPD) was unimpressed by the rebranding of the Facebook coin. On the fringes of the G7 meeting in December last year, he described the US corporation’s crypto project as a „wolf in sheep’s clothing“. According to the SPD candidate for chancellor, renaming the currency would not solve its fundamental problems. He accused the Diem organisation and the consortium around Facebook behind it of not having tackled the regulatory risks decisively enough. The German government would not accept a market entry as long as these deficits were not remedied.

Scholz thus reinforced his concerns, which the G7 already expressed in a similar form in October last year. The representatives of the most powerful industrial nations of the West fear above all a scenario in which the Facebook currency could compete with the established fiat currencies due to its enormous user numbers (1.8 billion in the third quarter of 2020). Everything possible must be done to ensure that the monopoly on money remains in the hands of the states, said the Finance Minister.

After a small question by the parliamentary group of the FDP in January, there were hardly any new findings by the federal government on the Diem case. When asked for an assessment of the planned introduction of Diem in Switzerland, the Finance Ministry referred to the so-called „Diem College“. This is an organisation that was founded by the Swiss Financial Market Supervisory Authority FINMA and to which the German BaFin also belongs. Its main task is the exchange of information. In this respect, for example, the prudential requirements had been addressed in order to approve Diem as a payment system. However, the requirements were not formulated further.