Meta (formerly known as Facebook) has just drawn a line under Diem, its cryptocurrency project. Three years after the announcement of the digital currency, the Diem Association, responsible for carrying out the idea, has come to the obvious: US lawmakers will never let Facebook issue its own currency. All assets of the organization are sold to Silvergate Capital Corporation.
It has been several months since the Diem project, formerly Libra, seemed to be taking on water. Last December, David Marcus, head of Meta’s cryptocurrency projects and fervent supporter of Diem, preferred to leave the ship. Soon after, rumors surfaced that Association Diem, to whom Facebook gave the project, was considering a takeover.
It is now official. Through a press release, Stuart Levey, CEO of the Diem Association, confirmed the sale of all intellectual property rights at Silvergate Capital Corporation. This is the division dedicated to digital assets set up by Silvergate, an American bank specializing in digital and based in San Diego.
Back to the wall, Meta abandons Diem
In his press release, Stuart Levey does not hesitate to tackling US financial regulatorswho declared war on the project as soon as it was announced in 2019. Originally, Facebook had imagined a means of payment, as instantaneous as a message, integrated into its various services, including WhatsApp, Messenger or Instagram.
“From the outset, Project Diem sought to harness the benefits of blockchain technology to design a better and more inclusive payment system”, explains Stuart Levey, who claims to have complied with the high demands of financial regulators. Lawmakers were particularly concerned that Diem would facilitate money laundering and online traffickingan argument often used to discredit cryptocurrencies.
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“We have actively sought feedback from governments and regulators around the world, and the project has evolved and improved significantly as a result” but “it had become clear during our discussions with the American authorities that the project could not go any further”, says the manager. With Diem’s infrastructure in hand, Silvergate hopes to issue its own cryptocurrency by the end of the year. Will regulators be more flexible with the bank?