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Meta, formerly known as Facebook, officially announced the closure of its Diem digital currency project after years of significant efforts to move the initiative forward.
Announcing the news on Monday, Diem CEO Stuart Levey confirmed that Meta is selling intellectual property and other assets related to the Diem stablecoin project to its Silvergate Capital Corporation.
The association Diem and its subsidiaries will start to liquidate the operations "in the coming weeks," levey said. The association, however, remains confident that Diem's ideals will continue to thrive even after Meta has formally terminated its commitment to the project, the CEO noted:
We remain confident in the potential of a stablecoin operating on a blockchain designed like Diem's to deliver the benefits that have motivated the Diem Association from the beginning. With today's sale, Silvergate will be well placed to advance this vision."
According to an official announcement by Silvergate, the company will purchase assets of Diem for the aggregate value of $182 million. "As part of integrating the acquired assets into Silvergate's existing technology, Silvergate expects to incur approximately $30 million in additional costs in 2022," the firm said.
Specifically, Silvergate Bank, a subsidiary of Silvergate and Meta’s stablecoin partner, will integrate its payment platform, the Silvergate Exchange Network, with Diem’s assets. The new combination will help the bank launch a 'new generation global payment system that is faster, easier to use and more cost-effective than existing solutions,' notes the announcement.
We have identified the need for a USD stable that is regulated and highly scalable to allow them to move funds unhindered. It remains our intention to satisfy this need by launching a stablecoin in 2022,' Silvergate CEO Alan Lane said.
Meta officially introduced its digital currency project back in 2019, originally called Libra and including a foundation of top global companies like Mastercard, PayPal, Visa, eBay and others. The project received massive global regulatory pushback, with financial authorities expressing major concerns over tech giants potentially taking over too much financial power.
Despite major regulatory pressure, Meta attempted to roll out some of its services in the United States, with WhatsApp messenger testing payments with Meta’s Novi wallet in December 2021.
"In the United States, a top regulator told us that diem was the best-designed stablecoin project the US government had seen," said the president.
Related: PayPal stablecoin: What that would mean for payments.
As the Diem Association finished its stablecoin, some of its original members went ahead with their own stablecoin plans. In January, ??PayPal officially confirmed that it was “exploring a stablecoin” that could be called PayPal Coin.
