The Diem stablecoin project, formerly known as Libra, has come to an end. Meta has sold Diem’s intellectual property (IP) and assets to a cryptocurrency-focused bank Silvergate, per Monday’s announcement.
Key takeaways:
- According to Bloomberg, which was first to report the news of Diem’s unraveling last week, Meta’s stablecoin experienced a “final blow” when the Fed prohibited Diem from being issued.
- Meta (formerly Facebook) has partnered with Silvergate in 2021 to issue the dollar-pegged stablecoin, but was unsuccessful in its efforts to convince regulators to greenlight the project.
- In late 2019, Facebook CEO and founder Mark Zuckerberg was called to testify on Libra as a part of a controversial congressional hearing. At the time, congressional lawmakers voiced their opposition to Facebook-issued cryptocurrency.
- According to Silvergate’s announcement, the bank paid a total of $182 million for the blockchain infrastructure developed by engineers working on Diem and expects to incur $30 million in additional expenses for the full integration of newly acquired assets into its existing payment infrastructure throughout the year.
- Silvergate envisions technology developed for Diem will boost the speed of its existing payment system, make it easier to use, and more efficient.
- The news of Meta winding down its stablecoin operation comes roughly a week after the Fed issued its long-awaited research paper on the digital dollar, which briefly examined stablecoins and their growing popularity.
- In a recent interview with Microstrategy CEO Michael Saylor, former Twitter CEO Jack Dorsey said Meta should have focused on a Bitcoin-powered payment solution instead of developing its own currency.
