The end: Facebook-backed digital currency Diem sold to bank

A once-ambitious but now faltering Facebook-backed digital currency project known as Diem is dead, its assets sold to bank holding company Silvergate Capital

Silvergate and the Diem Association announced the sale on Tuesday. Meta, owner of Facebook, did not comment.

A Facebook spokesperson, however, pointed to tweets from Stephane Kasriel, head of Meta’s cryptocurrency portfolio, Novi, who said the decision to sell was not made by Meta, but by the Diem Association.

“We hope the Association’s sale of its assets to @silvergatebank will allow the project’s vision to live on. Because we still believe in the mission of shared financial inclusion,” Kasriel wrote.

Diem said it “became clear from our dialogue with federal regulators that the project could not proceed. As a result, the best course of action was to sell the assets of the Diem Group” and the project s will be completed in the coming weeks.

It’s been clear for some time that Diem, which was first called Libra, was fighting an uphill battle with regulators. Meta gradually distanced itself from the project.

Last May, the Diem Association, which at the time included Facebook and 25 other companies, entered into a partnership with Silvergate Capital Corp. to issue a “stablecoin” backed by the US dollar. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities.

Facebook announced the Libra project in 2019, envisioning it at the time as a stablecoin based on a basket of national currencies that could serve as a global currency for unbanked people around the world.

But the effort has been significantly scaled back amid regulatory and trade backlash. It changed its name in December 2020.

About Ruben V. Albin

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