Facebook Selling Off Its Diem Cryptocurrency Project
The Diem Association, a group of companies working on a block-chain based payment system, is reportedly selling its technology assets to Silvergate Capital for $200 million, states the Wall Street Journal.
Meta, formally known as Facebook, is one of the founding members of the Diem Association.
Bloomberg also reported that Meta was working on selling Diem’s assets as a way to return some capital to the investors behind the project.
Earlier, Facebook planned to introduce Libra in 2019. Since then, Facebook and Diem have scaled their efforts, numerous times. Libra was initially meant to be a digital token backed by numerous international fiat currencies.
From the very beginning, the Diem Association faced strong opposition from regulators and central banks, as many believed Libra would compete with sovereign currencies with numerous macroeconomic effects. Others believed that the project would have caused shadow banking, inflation, and led to a way to escape monetary policies.
The Diem Association later switched to a more realistic take on stablecoins, by deciding to launch several single-currency stablecoins.
The Diem Association, with Facebook, launched a pilot version of Novi, a cryptocurrency wallet, which used the USDP as its currency, issued by Paxos with Coinbase managing crypto custody.
Moreover, the executive who originally proposed Libra and was in charge of leading Meta’s digital wallet, David Marcus, left the team. While many others followed suit.
According to Wall Street Journal, Silvergate Capital was supposed to issue some of the stablecoins and back them using cash from their account.
With the sale of the Diem Association, Meta and its partners will likely get some of their money back. Silvergate Capital, on the other hand, will become the sole company in charge of the Diem project.
Other companies currently involved in the project include Anchorage, Andreessen Horowitz, Checkout.com, Coinbase, Iliad, Spotify, Uber, and Union Square Ventures.