Meta’s (formerly Facebook) ambitious dream of “reinventing money” with its digital currency Diem, which would allow Messenger and WhatsApp users to make payments to each other, has come to an end. The news comes shortly after rumors that the Mark Zuckerberg-led company was trying to get rid of the project. after lack of support from regulators.
Diem Association, the consortium of venture capital firms and technology companies founded in 2019 to develop the payment network project devised by Meta, will sell its technology assets to Silvergate Capital, a financial entity focused on the world of digital currencies. The agreement, according to The Wall Street JournalIt is valued at around 200 million dollars.
Silvergate Capital is not a name unknown to Meta and the members of the Diem project, which included firms such as PayPal, Visa and Strip. It is the parent company of Silvergate Bank, the bank that was going to be in charge of issuing the Diem USD stablecoin, a digital currency that, being linked to the US dollar, would not have the volatility of other digital currencies such as Bitcoin.
The digital currency that failed to convince regulators
Meta promoted the creation of the Libra Association, a group of important players in the financial sector that would be based in Switzerland and that would contribute millions of dollars for its development. But US regulators raised concerns that the company’s digital currency could be misused, as well as risks to financial stability and data privacy.
This situation made the initial members of the association will leave the project and that Mark Zuckerberg had to defend him before the United States Congress. In 2020, to appease regulators, the coin was restructured, later renamed Diem, and the Diem Association announced a partnership with Silvergate Bank to turn the project into a dollar-pegged stablecoin.
However this was not enough. After the departure of the company of David Marcus, the head of the Diem project, the end of the project was accelerated, whose technological assets will now remain in the hands of Silvergate Capital. In Bloomberg They point out that, with Meta out of the picture, Silvergate Bank could be in a position to launch its own stablecoin, but there is no certainty about that yet.
Image | Diem
In Xataka | What is the difference between cryptocurrency, virtual currency and digital money