Last week, rumors arose that Facebook’s parent firm and its partners are considering exiting their struggling cryptocurrency project. The grapevines were correct, it turns out. Diem, Mark Zuckerberg’s cryptocurrency, will never see the light of day.
Diem, a Meta-backed cryptocurrency, is shutting operations following a series of rebrandings, public hearings, and high-profile personnel departures.
Diem revealed on Monday that it was selling its technology to Silvergate, a California-based crypto-focused lender, for $182 million, capping a multi-year endeavor that had frightened regulators.
Bloomberg reported earlier this week that the Diem Association, the organization in charge of digital money, is considering selling some of its holdings in order to restore capital to investors.
According to Bloomberg, conversations regarding how to “auction” its intellectual property and where the software engineers who designed Diem might go to find another source of income are still in their early stages.
Following an almost three-year campaign, Facebook and its partners have launched Diem, an exclusive digital currency previously known as Libra in 2019.
Despite their efforts, Diem’s supporters were unable to make an impact on their campaign, even when they went about patching a new identity to the project, downplaying Facebook’s role, and lowering their aspirations for a unified digital currency.
Many people feared something horrible would happen once David Marcus, Meta’s spokesman, and other important figures in the picture left the project late last year.
According to Diem CEO Stuart Levey in a news release, “the project could not proceed further” following recent discussions with federal officials therefore, the decision was made to dispose of it. The US Federal Reserve was already known to prevent Diem from flying.
The announcement by Facebook in 2019 of plans to establish a cryptocurrency sounded the early alarm bells for global banking titans, many of whom expressed concerns about the privacy and security of virtual money shrouded in mystery.
According to Enderle Group analyst Rob Enderle, the concept of Facebook developing its cryptocurrency and payment system was “too far” for authorities. After Meta created a cryptocurrency wallet called Novi, five Democratic MPs asked Meta CEO Mark Zuckerberg to cancel the Diem project.
Meanwhile, the Federal Reserve (Fed) and the European Central Bank (ECB) have begun examining the launch of their digital currencies, work that has been accelerated in part because of concerns about Diem.
