- Having announced in June 2019 that Facebook would launch a stablecoin, Meta will put the assets of the Diem association up for sale and return the money to investors.
- Diem is in talks with investment bankers about how best to sell his intellectual property and find a new home for the engineers who developed the technology.
- Silvergate Capital could be the new owner of DIEM’s technology for approximately $200 million.
The company called Meta today, but started life as Facebook, appears to have given up on its aspirations to launch a global stablecoin, and is reportedly selling all $DIEM assets.
As revealed by Bloomberg, heto Association DIEM, formerly known as Libra, would be considering returning all the capital to the investors who trusted in the project of a global stablecoin backed by a basket of fiat currencies.
But contrary to what one might think, there is actually not much to sell. DIEM did not accumulate a large number of physical assets, since, in essence, they accumulated intellectual property. In fact, your engineers are probably your most valuable assets.
A stablecoin that died before it was born
It is important to remember that DIEM is a project that emerged in 2019, at which time it was called ‘Libra’. This was intended to launch a cryptocurrency that would be used to make payments within Facebook, Messenger and WhatsApp.
The project quickly caught the attention of the crypto market for its potential and, in fact, managed to get large companies such as Visa, Mastercard, Uber and Spotify to jump on the boat.
Libra was initially to be a stablecoin backed by a basket of fiat currencies but was eventually narrowed down to focus on the US dollar. This happened mainly because since the project came to light, it faced great rejection by the world regulators.
Regulators against Diem
Regulators were initially concerned about the distributed nature of the project, especially what Facebook, now Meta,’s involvement in the cryptocurrency would look like.
Concerns revolved around the possibility of money laundering and monetary stability given the size of Meta, but in addition, the Cambridge Analytics privacy scandal gained traction once again.
Thus, in search of calming the waters, they decide to create the Libra Association to be responsible for compliance with financial laws and, in a certain way, separate it from Meta. However, the regulators never lowered their guard and, of course, investors such as Visa, Mastercard and PayPal quickly abandoned the project.
But, even so, the project continued to make adjustments with the aim of gaining the approval of the regulators and precisely in this way DIEM was born. The problem is that, at Despite all the changes, power was still concentrated in the hands of a group of companies and, therefore, the regulators never gave the go-ahead.
Thus, the project gradually faded away. In fact, financial technology executive David Marcus recently left DIEM to start a new company.
Silvergate Capital, new owner of DIEM
In this context, Reuters He reported that Diem Association was selling its capital to Silvergate Capital, for approximately $200 million dollars, according to the Wall Street Journal.
With this, the end of the cryptocurrency project destined to revolutionize finances by Meta would be marked. According to the Financial Times, it is likely that part of the proceeds from the asset sale will go towards returning their funds to the founding members.
You might be interested in: