San Francisco: Facing regulatory hurdles, the cryptocurrency dream of Meta CEO Mark Zuckerberg is officially over as the company has sold its digital coin known as Diem for around $200 million to Silvergate, a crypto-focused bank.
Originally launched as Libra and later renamed as the Diem Association, the cryptocurrency initiative faced regulatory backlash, and the US Federal Reserve was a key opponent to Diem launching.
“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead. As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate,a said Diem Networks CEO Stuart Levey.
“We remain confident in the potential for a stablecoin operating on a blockchain designed like Diem’s to deliver the benefits that motivated the Diem Association from the beginning,” he said in a statement late on Monday.
Over the coming weeks, the Diem Association and its subsidiaries expect to begin the process of winding down.
The Libra Association in December 2020 decided to change its name to Diem Association in a bid to reinforce its organisational independence.
The Diem Association (Diem means day in Latin) also had its subsidiary called Diem Networks to serve as the payment system operator.
Facebook and 20 partner organisations formally joined the digital currency project during a meeting in Geneva in October 2019.
In a move to win regulators’ hearts, the association had announced that its cryptocurrency will offer stable coins backed by just one nation’s currency, meaning some coins offered would serve as the equivalent value of a dollar or a euro.
However, several heavyweights pulled out of the Libra project, like PayPal, Mastercard, Visa, Mercado Pago, eBay, Stripe and Booking Holdings and Vodafone over privacy concerns.