Wednesday, February 21

Meta Confirms It Is Leaving Its Cryptocurrency Project, Diem, Behind

For Hannah Perez

Crypto bank Silvergate has agreed to buy Diem’s ​​intellectual property and assets. The Meta cryptocurrency project will continue under the leadership of the bank.


Meta, the social media giant formerly known as Facebook, is abandoning plans for its digital currency Diem after years of unsuccessful efforts to get the project off the ground.

The diem association, the organization behind the project that was previously called Libra Association, has confirmed recent rumors pointing to the sale of assets and intellectual property. as you pointed out DailyBitcoinReports last week suggested the company was looking to return capital to its investor members through a possible sale deal with bankers.

This Tuesday, the crypto-friendly bank and former partner of Meta, Silvergate Capital Corporation, revealed that it will acquire the intellectual property and other assets of the network Diem Payment. The diem association Y Silvergate They announced the move in a Press release which was published on the official page of the project.

The asset acquisition agreement includes infrastructure and development, implementation and operations tools to run a payment network based on Blockchain, according The Block. Silvergate you will also get “Proprietary software elements critical to running a network of compliant stablecoins“, assured the bank in another statement.

Diem changes hands to bank Silvergate

The diem association and its subsidiaries will begin to close their operations “In the next weeks”, added the CEO of DiemStuart Levey. The ad indicates that Meta is officially leaving its controversial digital currency project behind. However, the company is still confident that the plans will prosper under the bank’s leadership.

We remain confident in the potential of a stablecoin operating on a blockchain designed like Diem’s ​​to deliver the benefits that motivated the Diem Association from the start. With today’s sale, Silvergate will be well positioned to carry this vision forward.Levy said.

The statements suggest that Diem it’s not closing completely, it would just be changing hands. Silvergate, which had been associated with Diem in May 2021, confirmed plans to continue with the project. The bank’s CEO, Alan Lane, shared his enthusiasm for the deal, noting:

We were working with Diem last year and got to know the team very well, and we couldn’t be more excited to take the reins and bring a stablecoin to market hopefully later this year.

The head of Silvergate stated that the project Diem, under its new guise and leadership, could finally do what stablecoin issuers have hoped to do all along: find a niche in the payments sphere. Although he admitted that currently the stablecoinsare mainly used for cryptocurrency trading“, he stressed that Diem has the potential to beused by people” for “pay things“.

Rejection from regulators motivated the decision

Originally Libra, the cryptocurrency project of Facebook entered the scene in 2019 with the ambitious plan to create a token digital backed by a basket of fiat currencies from around the world. However, the initiative was soon met with pushback from regulators and was forced to change plans.

Instead of a digital currency backed by various fiat currencies, Libra turned into several stablecoins linked to national currencies, and finally to a stablecoin pegged to the US dollar under the name of ‘Diem‘. Also the former leader of the project, David Marcus, and the CEO of Meta, Mark Zuckerberg, testified before the United States Congress to defend the initiative.

However, despite different efforts, regulators continued to oppose the project. In October 2021, five Democratic senators, including the Banking Committee, called for closing Diem Y New, the digital wallet designed to keep Diem.

In its statement on the sale agreement, the diem association recognized the various regulatory obstacles that the project went through; although he reiterated his belief that under new management, the stablecoin will finally be able to thrive in the market.

Despite positive feedback on the network design, it became clear in our dialogue with federal regulators that the project could not go forward. Consequently, the best way forward was to sell the assets of the Diem Group, as we have done today to Silvergate.

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Sources: The Block, CryptoNews, Cointelegraph, archive

Article versioned by Hannah Estefanía Pérez / DailyBitcoin

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