Faced with regulatory headwinds, Facebook founder Mark Zuckerberg is abandoning his ambitions for a price-stable digital currency.

According to sources, the crypto initiative Diem Association, once known as Libra, is considering selling its assets and returning capital to investors. 

In November, a working group led by US President Joe Biden took the view that only supervised banks should be allowed to issue so-called stablecoins.

In addition, issuers' ties to individual companies should be limited to prevent "excessive concentration of economic power".

According to sources, Diem is now in talks with investment bankers about how best to sell the project's intellectual property.

It is also about a new home for the programmers who developed the technology.

When Facebook – which now operates as Meta Platforms Inc. – first presented the idea of ​​a stable digital currency in 2019, it was to revolutionize global payment systems.

The project involved dozens of other companies.

The possibility that companies like the social network giant could undermine the monetary policy and control function of central banks quickly alarmed politicians and authorities.

There were also concerns about privacy and money laundering. 

Faced with headwinds, partners like PayPal Holdings Inc. and Visa Inc. fled the Libra project, whose name was changed to Diem Association.

In May, Diem announced that Silvergate Bank would issue the Diem USD stablecoin and be value-pegged to the dollar. 

After lengthy discussions, the Fed finally told Silvergate last summer that it had concerns and could not assure Silvergate that the stablecoin would ultimately be approved for issuance. 

Fed officials and Diem officials declined to comment on the matter.

Meta did not immediately respond to a request.

Meta holds around a third of the shares in Diem.

The other shares are held by the other project members, as informed people report.

According to the website, Diem partner companies include venture capitalists such as Andreessen Horowitz, Union Square Ventures and Thrive Capital, as well as Singapore's sovereign wealth fund Temasek Holdings Pte, Uber Technologies Inc. and Coinbase Global Inc.