Meta launched Diem, its cryptocurrency project, in 2019. According to a Bloomberg report, the Diem association, which oversees the development of digital currency, sold its assets.
It's done for Meta, which was looking for a buyer for its Diem project.
The Diem Association, the consortium that Facebook founded in 2019 to build a futuristic payments network, ended its activities and sold its technology to a Californian bank, Silvergate Capital.
The Diem project sold for around $200 million.
The sale concerns in particular everything relating to intellectual property and patents.
Concretely, in the United States, the issuance of a stable currency, or stablecoin, must be carried out by a regulated bank.
Thus, in 2021, the acquiring bank Silvergate Capital was to be responsible for carrying out the issuance of the stable cryptocurrency.
The origins of the project
This cryptocurrency project by Mark Zuckerberg, heavily criticized since its launch, dates back two years. Facebook launched Project Diem in 2019 under the name Libra. The company had proudly touted it as a way for the social network's billions of users to spend money as easily as sending a text message. At the time, the cryptocurrency was called Libra and was initially designed as a stablecoin (stable currency). These stable currencies, or stablecoin, are backed by a classic currency, in this case the dollar. They are designed to be less volatile and provide more stability.
To support its launch, Libra has enlisted well-known partners in the e-commerce and payments space.
Such as PayPal, Visa and Stripe, to name a few names.
In other words, these partners have agreed to join the Libra association based in Switzerland, in charge of the management of the stable currency.
Each paid millions of dollars to develop the project.
A difficult launch
Right from the launch of Libra, critics of the project have been outspoken in their concerns about its effect on financial stability and data privacy. They feared that this cryptocurrency would facilitate nefarious activities such as money laundering and privacy violation. Of course, the risk was also that Libra would become a rival for “real” currencies such as the US dollar. From an institutional point of view, Jerome Powell, the chairman of the Federal Reserve, confided his concerns to the central bank.
In this context, the United States House Committee called Mark Zuckerberg to testify in October 2019. In reaction, some members of the consortium, such as Visa and MasterCard, abandoned the project.
Eventually, Libra's ambitions were scaled back and the project was renamed Diem.
The Federal Reserve not sure whether to accept the Diem project
In December 2020, Diem indicated that it would first launch a first dollar-backed digital asset.
The goal was to eventually embark on the launch of several stablecoins and a multi-currency currency.
In the end, the project was limited to the original stablecoin, Diem USD, and the partnership with Silvergate Bank began.
To make matters worse, last summer the Federal Reserve announced at Silvergate that it was not sure whether to accept the Diem project.
Diem is reportedly currently in talks with investment bankers about next steps, including how to sell his intellectual property.
The goal ?
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