Facebook’s Diem Networks US has partnered with a risk assessment company called K2 Integrity to develop innovative solutions for the Diem Networks US Financial Intelligence Function [FIF]. According to the official announcement, the main objective of the FIF is to safeguard the Diem Payment Network [DPN] from illicit financial activity.
Diem Networks US has reportedly developed a blockchain-powered payment system for the purpose of making payments cost and time-efficient without compromising the security of its users and the integrity of the financial system. It aims to revamp the payments landscape by incorporating the benefits of blockchain technology to consumers, including those underserved by the current banking system and businesses across the globe.
Stuart Levey, who happens to be the Chief Executive Officer of Facebook’s Diem Networks US, revealed that designing a framework that puts high financial crime compliance standards have been one of the Diem project’s top priorities and went on to add,
“This is an area where we are continuing to innovate. We are excited by this opportunity to partner with K2 Integrity, a team that has a wealth of experience in this space and is respected internationally for their leadership on anti-money laundering and counter-terrorist financing [AML/CFT] issues.”
The official press release highlighted that Diem intends to meet compliance standards, an issue plaguing the entire market.
Facebook Diem Controversies
Formerly known as Facebook Inc’s Libra project, the Digital currency group Diem Association has recently revealed its plans to roll out a US dollar stablecoin. Diem Networks US is one of the units of the widely reported stablecoin project. Since last year, the company has been under the regulatory scanner of regulators around the globe for its potential to disrupt the national sovereignty of currencies.
Due to the fanfare and controversy over the original idea, the Libra cryptocurrency changed to Diem. This was clearly an effort to show that the project has “organizational independence” as it attempted to be more agreeable to governments. However, its ambitious roadmap still seemed to threaten traditional government-run financial systems.
In fact, Facebook Inc.-backed Diem token and Tether [USDT] stablecoin were the main focus of Treasury Secretary Janet Yellen’s closed-door meeting US regulators held on the financial risks posed by stablecoins. Yellen had reportedly urged watchdogs not to delay and “act quickly” in laying down rules to ensure the safety of stablecoins.