Diem Stablecoin Prepares for Liftoff With Fireblocks Custody Partnership

Diem Stablecoin Prepares for Liftoff With Fireblocks Custody Partnership

Crypto custodian Fireblocks and payments platform First Digital Assets Group are providing connectivity and support to diem, the global stablecoin and payments system formerly known as libra.

Fireblocks and First are providing the digital plumbing to allow financial service providers such as banks, exchanges, payment service providers (PSPs) and eWallets to plug into Diem on day one, the companies said.

Facebook unveiled the libra project in 2019 and almost immediately became embroiled in a whirlwind of regulatory blowback and governmental outrage. The project’s ambitious goal to create a private global stablecoin backed by a basket of fiat currencies threatened to unseat the high echelons of sovereign monetary policy.

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Now, the rebranded diem plans to emerge around the end of this quarter, with a modest minimum viable project based around a U.S. dollar stablecoin.

It will be integrated, via Fireblocks and First, with Diem Association members like Spotify, Farfetch, Lyft, Uber and Shopify. (It’s notable that former Libra Association members PayPal, Mastercard and Visa are busy pursuing their own plans with public cryptocurrencies.)

The streamlined project has bent to the will of regulators and operates on a strict permissioned basis with a specific onboarding process to become a diem virtual asset service provider, or VASP.

“What Fireblocks and First have built allows merchants and payment service providers to use the diem stablecoin as a payment method in a way that’s really integrated,” Michael Shaulov, CEO of Fireblocks, said in an interview. “It’s more or less seamless, like how they would accept Visa, Mastercard or any other form of payment.”

The diem payments system also allows things like refunds, and the stablecoin can be easily changed back into fiat to pay merchants or salaries and so on, Shaulov said. Looking further down the road, the network also includes a sophisticated smart contract language called Move, Shaulov added, which could be used in areas like permissioned decentralized finance (DeFi.)

Shaulov believes diem will still be one of the fundamental projects bringing crypto into the mainstream, despite taking a while to get off the ground and garnering criticism because of its narrowed-down launch product.

First has built a solution for merchants to accept Diem stablecoin

Israeli payments startup First DAG has built a solution for merchants to accept Diem stablecoin when it goes live sometime later this year.

The API solution will connect merchants to the Diem network to facilitate transactions, enabling their clients to utilize the Diem stablecoin as a payment method.

“We want merchants to be able to accept Diem,” First CEO Ran Goldi told The Block. “So if you are a merchant and you are already working with a payment service provider (PSP) that we have integrated with, you will able to accept Diem without any integrations.”

First will announce the supported PSPs “in the next several months,” said Goldi. As for Diem, Goldi said it should launch “in the next six months.”

To accept Diem, merchants won’t have to know about crypto or blockchain, said Goldi, because First will handle the related processes. Merchants will get paid in their native fiat currencies, he said. As for end-users, Diem will be just another payment method.

“Diem is going to be huge” since Facebook has roughly 2.8 billion monthly active users, said Goldi. Diem, formerly known as Libra, is led by Facebook, and the project has been delayed due to significant regulatory scrutiny worldwide.

Goldi said Diem would be the “easiest” payment method integrated on Facebook’s several platforms such as Instagram and WhatsApp. “You could just click a button and pay with Diem.”

The first version of Diem would be similar to other payment solutions such as PayPal, Goldi told The Block. But in the future, the Diem Association could add more features such as connecting the Diem network with other blockchain networks and a central bank digital currency (CBDC). “Then we will see the real value and benefits from Diem,” he said.

Besides Diem, Goldi said First will also support other stablecoins and a CBDC in the future.

As for the Diem solution, First has partnered with digital security startup Fireblocks to help safely keep the stablecoins.

“Diem, through its digital currencies, is set to empower a wider adoption of cryptocurrency and will require the highest levels of security for real-time payments and ensure the safety of funds and financial data of its users,” said Michael Shaulov, CEO of Fireblocks. “To accelerate the adoption of Diem payments, Fireblocks has partnered with First, to provide an easy-to-use platform for licensed providers to launch services supporting Diem.”

Diem Stablecoin Partners With Fireblocks & First

The rebranded Libra network will leverage the partnership to come out with an initial product at the end of this quarter.

According to the company’s press release, Fireblocks and First Digital Assets will provide a secure wallet and infrastructure for financial institutions to connect to the Diem network. Without a turnkey solution that covers all integration aspects, any institution looking to add support for Diem would have to build the technology from scratch and qualify as a Virtual Asset Service Provider (VASP).

“As custodians, wallets, exchanges, PSPs, and other VASPs prepare for the Diem network, we’re excited to be working with Fireblocks to deliver everything a VASP needs, from risk to on/off-chain communication, and liquidation,” said Ran Goldi, the CEO of First.

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Founded in 2017, First has launched the first global digital payment platform as a service, enabling large merchants, PSPs, and Acquirers to accept and process stablecoin payments. Fireblocks is an enterprise-grade platform providing solutions for moving, storing, and issuing digital assets.

The Diem stablecoin will be integrated with members of the Diem Association like Spotify, Uber, Shopify, Farfetch, and Lyft. Michael Shaulov, the CEO of Fireblocks, said the companies have provided merchants and payment service providers an integrated way to use the Diem stablecoin.