Facebook is Selling Off Its Diem Cryptocurrency Project

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Facebook is Selling Off Its Diem Cryptocurrency Project

According to the Wall Street Journal, the Diem Association, a collection of companies working on a block-chain-based payment system, is selling its technical assets to Silvergate Capital for $200 million.

One of the founding members of the Diem Association is Meta, formerly known as Facebook.

Bloomberg also reported that Meta was working on selling Diem’s assets in order to recoup some of the project’s funding.

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Previously, Facebook had planned to launch Libra in 2019. Facebook and Diem have scaled their efforts several times since then. Libra was intended to be a digital token backed by a variety of worldwide fiat currencies at first.

The Diem Association has experienced severe criticism from authorities and central banks since its inception, as many believed Libra would compete with national currencies, resulting in a slew of macroeconomic consequences. Others thought the scheme would lead to shadow banking, inflation, and a mechanism to circumvent monetary policies.

Later, the Diem Association decided to take a more realistic approach to stablecoins by launching numerous single-currency stablecoins.

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The Diem Association collaborated with Facebook to produce a beta version of Novi, a cryptocurrency wallet powered by Paxos and managed by Coinbase.

Furthermore, David Marcus, the executive who proposed Libra and was in charge of leading Meta’s digital wallet, has departed the firm. As a result, a large number of people followed suit.

Silvergate Capital was meant to issue some of the stablecoins and back them with cash from their account, according to the Wall Street Journal.

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Meta and its partners are likely to recoup some of their investment with the sale of the Diem Association. Silvergate Capital, on the other hand, will be in charge of the Diem project as the sole entity.

Anchorage, Andreessen Horowitz, Checkout.com, Coinbase, Iliad, Spotify, Uber, and Union Square Ventures are among the companies actively collaborating in the project.

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