Facebook To Close Down Diem Crypto Venture – Report
End of the road for Diem (formerly Libra) digital currency, with sale reported of Diem Association to financial institution
Facebook’s dalliance with cryptocurrencies is reportedly coming to an end, as Meta reportedly is offloading the troubled venture to a financial institution.
Both Bloomberg and the Wall Street Journal both reported on Wednesday said that Diem Association is selling its technology to crypto-focused bank Silvergate Capital for $200 million.
The move comes after David Marcus, the executive in charge of Facebook’s (Meta’s) cryptocurrency efforts, announced in December he was leaving the firm.
Libra/Diem
The departure of Marcus came as no surprise, considering Facebook’s attempt to launch the Libra cryptocurrency that could be used by online users to send money to anyone in the world via Facebook products, failed to get off the ground.
Meta’s financial projects unit had completely surprised the world when it announced the Libra (later Diem) blockchain currency and the Calibra (later Novi) digital wallet in June 2019, and said it planned to launch it by June 2020.
Almost immediately the project was widely criticised by regulators around the world, including France, the Bank of England, and the US Federal Reserve chairman Jerome Powell, as well as others.
This sustained pressure and pushback from politicians and regulatory bodies globally, caused the project in March 2020 to announced it was to ‘rethink’ its plan for Libra.
And then in April 2020 the Facebook-backed Libra project drastically reduced the scope of its planned cryptocurrency.
Neither the Libra blockchain currency and the Calibra wallet were realised, but Facebook did finally released its digital wallet product, renamed as Novi.
Diem sale
The Diem Association now oversees the development of the Diem digital currency (formerly Libra) as a US dollar stablecoin.
Stablecoin is a cryptocurrency pegged to a traditional currency.
Meta reportedly owns about a third of the Diem Association, and the remainder is owned by association members, such as Andreessen Horowitz, Union Square Ventures and Ribbit Capital.
Now according to Bloomberg, Diem is now in talks with investment bankers about the next steps, including how to sell its intellectual property, in an effort to capture whatever value is left.
Sources told Bloomberg that the association is also trying to find a new destination for the engineers who developed this technology.
Discussions are apparently still in early stages, and there is no guarantee that Diem will find a buyer.
Even if it does, the report noted that it is unclear how it would set a value on the project’s intellectual property, or the engineers who developed it.
