Meta, formerly branded as Facebook, has officially announced the closure of its digital currency project Diem after years of major efforts to move forward with the initiative.
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.
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The Diem Association and its subsidiaries will start winding down operations “over the coming weeks,” Levey said. The association, however, is still confident that Diem’s ideals will continue to thrive even after Meta officially terminated its involvement in the project, the CEO noted:
“We remain confident in the potential for a stablecoin operating on a blockchain designed like Diem’s to deliver the benefits that motivated the Diem Association from the beginning. With today’s sale, Silvergate will be well-placed to take this vision forward.”
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 of 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 “next-generation global payment system that is faster, easier to use and more cost-effective than existing solutions,” the announcement notes.
“We identified a need for a U.S. dollar-backed stablecoin that is regulated and highly scalable to further enable them to move money without barriers. It remains our intention to satisfy that 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 senior regulator informed us that Diem was the best-designed stablecoin project the U.S. government had seen,” CEO Levey stated.
Related: PayPal stablecoin: What it could mean for payments
While the Diem Association is wrapping its stablecoin, some of its original members are moving forward with their own stablecoin plans. In January, PayPal officially confirmed that it was “exploring a stablecoin” that could be called PayPal Coin.