Bloomberg reported on the possible collapse of Meta’s Diem project
Meta-backed steblycoin project Diem (formerly Libra) is falling apart under regulatory pressure, Bloomberg writes.
Diem Association is considering selling intellectual property and other assets to “return capital to member investors,” according to its sources.
The consortium is also looking for new jobs for its software engineers.
Facebook’s (now Meta) plans to release its own cryptocurrency became known in 2018.
In June 2019, the Libra basket-currency-backed steiblocoin project was officially announced with the publication of a white paper. At the same time, Facebook unveiled the Calibra wallet. Earlier, the corporation’s namesake division was headed by former Coinbase board member and Facebook vice president Tron is seeking David Marcus.
Facebook created the Libra Association, a nonprofit organization to manage the payment network. Visa, Mastercard, PayPal, Uber, Spotify, Andreessen Horowitz, Coinbase and other well-known companies were among its members.
Facebook’s cryptocurrency project has alarmed regulators, and in July, the U.S. Senate Banking Committee held a hearing on it.
In October, it became known that the payment firms Visa, Mastercard, PayPal and Stripe did not rush to sign official documents on participation in Libra Association due to regulatory problems. They have since withdrawn from the project.
In May 2020, Facebook rebranded the wallet for Libra from Calibra to Novi and created a new operator for it. In December, the consortium behind the project changed its name to Diem Association.
Despite repeated announcements, the launch of the Diem coin never happened.
Stablecoin came under scrutiny from financial regulators in the U.S., including the SEC and Treasury, and globally in 2021.
According to Bloomberg, in May the Diem Association entered into an agreement to issue Diem with Silvergate Bank, which was to be the issuer of the now dollar-linked Stablecoin. However, the bank did not receive approval from the U.S. Federal Reserve.
The publication’s sources called this the final blow to Meta’s cryptocurrency plans.
Recall that in December 2021, David Marcus, head of Meta’s payments division, announced his departure from the company.