After multiple congressional hearings, rebrands, and several high-profile staff departures, Diem, the cryptocurrency project Facebook founder Mark Zuckerberg, is finally calling it quits. Diem Association has announced its sale of intellectual property and other assets to Silvergate Capital Corp.
The cryptocurrency initiative was initially known as Libra. When it was launched in 2019, Facebook planned to use stablecoins, stable-value digital currencies to revolutionize global financial services. Libra originally had several dozen partners, but many of them left soon after the congress and other regulatory boards began to scrutinize it. The Libra project was eventually rebranded to Diem in an ambition to scale back.
Facebook, now Meta Platforms Inc., started Diem to make payments and money transfers cheaper and faster. However, Diem never got off the ground because of resistance from federal regulators.
Diem was considering selling its assets to return capital to its investors. But now, Diem will sell its assets to Silvergate for about $200 million. Silvergate is a crypto-focused bank working on launching a stablecoin pegged to the U.S. dollar.
The decision to sell Diem to Silvergate was made after it “became clear from our dialogue with federal regulators that the project could not move ahead,” Stuart Levey, Diem CEO, said in a press release.
There’s always the chance that Silvergate or another player revives Diem because Diem’s design was more transparent and regulator-friendly than a lot of existing stablecoins. However, with its founder, David Marcus, and most of Libra’s founding team gone from Meta, the odds of Diem ever reemerging with the same level of backing seems slim.