Diem/Meta - to be or not to be

Meta - formerly known as Facebook, announced yesterday that the Diem project will be completed after two years of development and effort.

All of this was written by Diem CEO Stuart Levey in a press release on Monday. He also mentioned that work would be phased out in the coming weeks and resources diverted from the project.

“Despite the increasingly positive feedback on network design, our conversations with them made it clear that we could not move forward because of federal regulators. As a result, the best decision was to sell Diem's ​​assets. ”

Meta sold the ownership and assets related to the projects to Silvergate Capital Corporation. The Bank of California wants to integrate stabilcoin payment options into its existing payment service, the Silvergate Exchange Network. In exchange for Diem, Silvergate paid 1.2 million in its own stock and $ 50 million, for a total value of $ 182 million.

“We see a market demand for a dollar-based stabilcoin that is regulated and highly scalable so that we can move money across borders without barriers. Our goal remains to meet that demand by launching a stabilcoin in 2022, ”said Alg Lane, CEO of Silvergate.

In 2019, the Meta officially spoke for the first time about plans for a digital currency. Back then, the project was called Libra and organized under a foundation with global giants such as PayPal, Visa, Mastercard and eBay on its board. However, U.S. and European regulators have fueled serious resentment over the project, which has only been partially addressed. After that, several members left the Foundation, and the concept was fundamentally rewritten and a rebranding took place - that’s when Diem became Libra. The new plans were about a simple stabilcoin that would make regulators one more relaxed, but fundamental concerns did not go away: with financial expansion, Zuckerberg’s influence and power would increase even further. Despite regulatory pressure, Meta reached an open test last December where a few thousand WhatsApp users could try out Novi’s wallet.

Diem will continue to live in the Silvergate system, but the bank is likely to be featured under its own brand and token name in the near future.