Meta will not have succeeded in bringing his cryptocurrency project to fruition. First called Facebook Coin in 2018, then Libra in 2019, then Diem a year later, the virtual currency technology developed by Meta has just been bought for a pittance by the Californian bank Silvergate.
Meta abandons Diem, its cryptocurrency project
It’s official: Meta has definitely abandoned its cryptocurrency project. The American giant sold, on January 31, 2022, its assets to Silvergate Capital Corporation, a California bank. Rumors had already been circulating for several days. We even knew that Silvergate had formulated an offer of 200 million dollars in an attempt to redeem Diem. A tweet and a press release came to clarify and formalize the situation.
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In 2021, the Californian bank Silvergate had already approached Meta de Diem to become its partner. At its side, the institution should have managed the reserves and issued the currency. Eventually, she inherits the entire project. It is the end of a dream for Meta. When it was launched, the social network panicked the world and governments by claiming to offer a new kind of virtual currency. At the time, Facebook promised to cut out middlemen and the astronomical fees to transfer money from one country to another.
1/7 From the statement by the CEO Stuart Levey on the sale of the Diem group’s assets to Silvergate — “From the outset, the Diem project has been focused on leveraging the benefits of blockchain technology to design a better and more inclusive payment system. pic.twitter.com/fX9ptwDt0k
— Diem Association (@DiemAssociation) January 31, 2022
Three years of trying to convince regulators
Initially, Mark Zuckerberg’s group planned to set up a stablecoin, based on a blockchain. Over the months, the project became more and more modest. He finally focused on the US market where the currency was to be pegged to the US dollar. What allow its value to be more stable than bitcoin. Thirty partners were on board, including Mastercard, Visa, PayPal, Uber and Spotify. Enough to reassure regulators. In appearance at least.
In fact, nothing works. Nobody wanted one of the most powerful companies in the world be an issuer of a virtual currency. In Diem’s press release, Stuart Levey, the association’s chief executive, said that “Dialogue with federal regulators was closed. It had become apparent during our discussions with the US authorities that the project could not go ahead”. A roundabout way of saying that in reality, the Federal Reserve has vetoed. Finally, Diem and its subsidiaries will be liquidated. Intellectual property and technology are taken over by Silvergate.