Facebook-backed Diem Association has announced the sale of its crypto venture for $182 million. After working for around three years on the project, the company will be selling its assets to Silvergate Capital Corporation.
In mid-2019, Facebook founder Mark Zuckerberg had launched the venture under the name of Libra. Although the company is a separate organization, Facebook funded the project officially. Soon after the project’s launch, Libra had to face continuous opposition from several policymakers.
Diem officials have said that the company was not in a position to move forward with the “dialogue with federal regulators.”
In the media statement, Stuart Levey, Diem chief executive, stated, “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.” He then added, “As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”
Facebook had ventured into stable coin through Diem. It aimed to resolve the highly volatile nature of cryptocurrencies. The company wanted to set its value linked to reducing volatility and bringing more stability similar to other assets and currencies.
Although it was a rebellious venture, surprisingly, it is not the reason for the company’s sell-off. The political interruptions and opposition became a major hurdle in completing the project. Policymakers had raised concerns regarding money laundering and the illicit use of stablecoin.
In the 2019 hearing, Mark Zuckerberg had stated, “I believe that this is something that needs to get built, but I get that I’m not the ideal messenger for this right now.”
Libra had almost completed its work on stablecoin and was supposed to launch the stablecoin in Jan 2021. However, the project was interrupted several times by regulators and lawmakers worldwide. Consequently, the project had to face pushed launch dates and several delays.
Diem CEO Stuart Levey had made statements defending his company’s intentions and work. According to him, the purpose and work of stablecoin was to reduce “industry-leading controls” and “protect consumers” since the company intended to minimize the risks involved. He spoke out against the U.S. policymakers, blaming them for its closure.
Facebook’s Diem venture has come to an end, however, its crypto wallet, Novi, is still running smoothly on the pilot project of Pax Dollar stablecoin. It is unclear how Novi’s road will look in the future.
“We hope that the Association’s sale of their assets to @silvergatebank will allow the project’s vision to live on. Because we still believe in the shared financial inclusion mission,” Stephane Kasriel, Meta’s head of Novi, tweeted.
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