Facebook-Backed Diem Abandons Swiss License Application, Will Move To the US (cnbc.com) 34
Facebook-backed digital currency project Diem -- formerly known as Libra -- said Wednesday it has withdrawn its application for a Swiss payment license and will instead shift its operations to the United States. From a report: The Diem Association, which oversees development of the Diem digital currency, had been pursuing a payment system license with Switzerland's FINMA watchdog. Diem has now dropped plans to secure Swiss regulatory approval, while its U.S. subsidiary has partnered with Silvergate, a California state-chartered bank, to issue the token. "While our plans take the project fully within the US regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA to consider the project," Stuart Levy, Diem's CEO, said in a statement. Diem said it plans to move its operational headquarters from Geneva to Washington, D.C., where its U.S. unit is based.
Muggers don't set up next to the cop shop (Score:1, Flamebait)
This move from Switzerland to the US isn't much of a surprise. After all, how many thousands of unseaworthy old scows are currently wallowing around the world's oceans under the Panamanian flag, looking for a convenient reef and an insurance claim?
Shifty corporations have always preferred to set up shop in Third World countries.
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Re:Muggers don't set up next to the cop shop (Score:4, Insightful)
The United States is a third world country where it comes to privacy regulations. Which is what matters to Facebook, as they want to analyze that purchase data as intrusively as they can get away with.
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The United States is a third world country where it comes to privacy regulations. Which is what matters to Facebook, as they want to analyze that purchase data as intrusively as they can get away with.
Indeed, well said. As to Swiss banking laws, here is one that shows how serious privacy is taken: Say you find a list of bank customers and accounts in a ditch. If you publish those, you may go to jail, does not matter whether you have any connection to the financial system. This data is privileged and everybody has to protect it even if they come into possession by accident. So if you find such data, you better hand it over to the police immediately. (Not that Swiss banks are letting their customer data ly
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Thanks for that. I learned something today.
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You are welcome.
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I love the way you cherry picked California, even after the power outages and fires. How about we discuss Buffalo. Turn down the wrong street in that place, and you'll think you've stumbled into the worst shit-hole in Somalia...but with snow.
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Shiba? (Score:2)
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Any rando can make a meme coin and get ric but facebook cant even make a real lone.
Maybe the issue is that they want this to be usable as currency? The other digital "currencies"[*] are more of a digital collector's item than actual currencies
[*] A currency should be a usable, stable medium for exchange of value... not a digital tulip you buy because you think someone else will buy it for more of a real currency
Re: Shiba? (Score:2)
Like Dash? Already done. No need for FB to enter the sphere...
Left Un-Said (Score:5, Insightful)
When Diem was first announced, it was going to be independent of fiat currencies. Then it was going to stay independent and peg it’s value to a bunch of different fiat currencies, in an attempt to avoid the sort of currency volatility challenges that have plagued Bitcoin.
Now, Diem is going to remain exclusively within the US and be pegged to the U.S. dollar.
Which rather begs the question if this is the case, why do you need Diem at all? What possible advantage does it give a user? What is the business case in favor of using it?
And this is the key question. Or, more accurately, I think the answer to that question becomes key.
If you step back a pace and squint a bit, it starts to look like the Facebook strategy is to build a currency that can only be traded on the Facebook platform [and supporting partners]. In other words, it’s a captive market. It’s a market where you can “buy in” by converting your U.S. dollars in to Diem currency, but it won’t be designed to make it easy for you to convert in the opposite direction.
In other words, it’s like “Air Miles for Facebook”. It’s a way of allowing Facebook to create a walled garden for currency, which they control. Or it could be like the millions of people who pay for content on the Sony PlayStation platform by purchasing vouchers. The voucher system lets you buy a $50 voucher and credit your PlayStation account. Then it lets you buy a $40 game. Meanwhile, the $10 in value sits as “credit” on your PlayStation account while the actual ten bucks sits in Sony’s bank account, earning them interest, thank you very much.
Fool’s Gold.
I think it could be bigger than that (Score:4, Interesting)
There's no doubt that Zuck is envious of Paypal & Cashapp, wants to get part of that business.
But with their platform they have a stronger tie: they could insist that any advertiser on FB & IG will be mandated to offer (at first), and then later require, "ZuckBucks" to be used for purchasing.
There will be a transfer fee of course from banking deposits into ZB, further encouraging people to hold their cash in ZB, giving Facebook free capital as you've said. They can then become a bank and leverage that to give loans.
But what I think is the ultimate goal centers around their core business & money making: targeted advertising. What is the holy grail in ad analytics? True conversion rate. Not who clicks on an ad---clicks are cheap. But who actually ends up buying. There are all sorts of models and vague approximations and attempts to correlate "who saw an ad" to "who actually bought" since the beginning of the advertising age, but almost nobody (except maybe Amazon in a limited area) has hard data.
ZuckBucks will inevitably be loaded with ad & id tracking, so the use of ZB to buy something from an advertiser can be directly linked to the Facebook ID and ad presentation, even if this transaction happens entirely off the Facebook site---but using ZuckBucks blockchain.
That will give Facebook enormous data, and hence power---they will have the ultimate gold standard of ad-analytic hard-label outcomes and be able to make far better machine learning ad models that nobody else can do, and that directly gives them asymmetric information on ad pricing.
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I absolutely think you hit on a key feature with your observations around conversion rates (from ad displays to clicks to buys).
I'm not convinced that FB will force advertisers to offer products using ZuckBucks, but perhaps they're wealthy enough to offer enticing discounts for those that do. Important to note that this would only be viable if the ZuckBuck remained pegged to the US dollar on a 1:1 "exchange rate".
I do suspect that
Re: Left Un-Said (Score:2)
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Maybe they felt that Switzerland gave diem a degree of credibility that it was an "international currency"? Now that they have decided that, in the short term, they will stick exclusively to the US dollar, setting up and operating a remote center in Switzerland would be a pointless expense [unless they already had a well-established presence there, which I don't believe to be the case.
But there might be even more aspects to this... FB's interest in diem might be on a follow-the-money basis: th
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I think you're describing the relatively far-future.
In the shorter term, I'd expect to see discounts on FB advertising, or indeed any other FB products when paying with ZuckBucks (given it's now USD-pegged, I think that's a name what could stick ;-). At the moment, a VR headset is, say, $299. Pay maybe $250, or perhaps even $200 is you pay by ZuckBucks. Or alternatively, pay in $300 and get ZB400 or whatever.
These discounts will see the "ordinary people" suddenly flock to ZuckBucks - even though they'll be
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Re: Left Un-Said (Score:2)
There's no reason to believe you will have to use FB to use Diem. That's the difference. I can't easily use my airline miles except at the airline. Diem can work with a variety of wallet apps from different vendors and you're not stuck in the ecosystem.
On the other hand, if this is just getting pegged to the USD, why wouldn't you just use USDC, which has existed for years and is backed by someone more trustworthy than FB?
Jesus, what is the world coming to (Score:2)
if even the Swiss aren't too hot about allowing dodgy financial instruments...
Re: Jesus, what is the world coming to (Score:2)
The Swiss financial industry isn't what it used to be. They are mostly in line with other European countries now in their banking policies.
Because (Score:1)
Umm if anyone can create crypto coins (Score:1)
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Facebook have already said they are pegging the value of Diem to the US dollar.
Re: Umm if anyone can create crypto coins (Score:2)
They have ALSO said they were pegging to a basket of currencies.
The reality is they are throwing everything against the wall to see what sticks. They know if they can somehow get a payment network attached to their 4 billion users it will be worth a fortune. But they're not sure how.
Re: Umm if anyone can create crypto coins (Score:1)
Do I read this right? (Score:2)
Nobody wanted to touch this with a ten-foot pole and therefore they chose the US?
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Nobody wanted to touch this with a ten-foot pole and therefore they chose the US?
Because in the US, greed is great and making money excuses anything and everything. Well, not quite, but as long as these people stay away from teenagers and socialism, they will be fine in the US.
Re: Do I read this right? (Score:2)
To be fair, "I'm taking dollars and promising to give them back" sounds much better than "I'm taking dollars then offering a collateralized debt obligation wrapped in a digital token, which will be backed by an algorithmically purchased basket of foreign currencies which I purchase with the dollars".
One sounds like a gift card. The other sounds like a product which takes down the world economy.
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You're referring Switzerland as nobody? Interesting.
Means this stuff is a bad idea (Score:3)
FINMA has relatively high requirements, but they are entirely sensible and do recognize the current situation with regards to IT threats and attacks adequately. You should probably stay away from anything financial that tried and failed to get FINMA approval.
Re: Means this stuff is a bad idea (Score:2)
It's a different product though. The Swiss approach was with a basket of currencies backing a token whose price is free to fluctuate. The American approach is a simple one-to-one peg.
So they changed the name... (Score:1)