Facebook's Failed Cryptocurrency Project 'Diem' Is Now Up For Sale
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Just over two years after Facebook founder Mark Zuckerberg announced the company's new cryptocurrency, now called Diem, to the world, the project seems to have come to an end, according to a report from Bloomberg.
In 2019, Facebook announced that it had set up the Libra Association, later renamed the Diem Association. This not-for-profit organization was headquartered in Geneva, Switzerland, and it was created to manage the new cryptocurrency.
It turns out that the association is now looking to sell its assets, citing heavy resistance from regulators to the digital currency created by the Facebook company, which now goes by the name of Meta. Amid regulatory scrutiny, Diem's founder David Marcus, left Meta last year. However, it was resistance from the U.S. Federal Reserve aimed at one of Diem's key banking partners, Silvergate Capital Corp., that "dealt the effort a final blow", according to Bloomberg.
Meta's crypto plans are on hiatus
One of the first indications that Facebook wanted to enter the cryptocurrency space came in 2018, when the social media giant announced it wanted to trial a U.S. dollar-backed "stablecoin" in India that could be used via Whatsapp. At that time, trust in the social media giant was at an all-time low due to the Cambridge Analytica scandal.
When Libra — now Diem — was first revealed to the world in 2019, Facebook's cryptocurrency was described as a digital token backed by a basket of currencies. By relying on a number of currencies, including the U.S. dollar, the U.K. pound, the euro, the Swiss franc, and the Japanese yen, the idea was that Libra would be highly protected from the risk of currency fluctuations. However, regulators were quick to stop the idea from moving forward, leading to rebranding that never quite stuck or gained traction.
Meta also recently provided another big hint that its Libra project had bitten the dust. As a report by The Verge in October pointed out, Meta finally released its digital wallet, which was announced alongside Libra. However, the company released it with a third-party cryptocurrency called Paxos instead of Libra. Now, according to Bloomberg, Diem's intellectual property is up for sale, and it's unclear whether they will find a buyer for a digital currency that has essentially been halted by regulators.
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