Mark Zuckerberg’s stablecoin project Diem officially terminated, confirms Diem CEO Levey
Formerly Facebook, Meta, has made an official announcement of the closure of Diem, its digital currency project, after having invested years of major efforts in moving forward with the initiative.
The news had been announced on January 31 by Diem CEO Stuart Levey where he confirmed that Meta is now selling intellectual property and other assets that are related to the Diem stablecoin project to its Silvergate Capital Corporation.
The Diem Association, as well as its subsidiaries, would be starting the winding down operations “over the coming weeks,” Levey informed media. The association is still confident, however, that Diem’s ideals would keep continuing to thrive even though Meta has officially terminated their involvement in the project.
Levey has noted that although the deal is terminated, the team remains confident in the potential for a stablecoin that can operate on a blockchain that is designed like Diem’s for delivering the benefits that motivated the Diem Association from the start. As the current sale with Silvergate is recorded, Levey hopes the firm is “well-placed to take this vision forward.”
As worded in the official announcement by Silvergate, the company would be purchasing assets of Diem for the aggregate value of $182 million. The firm has said that as part of the integration of the acquired assets into Silvergate’s existing technology, it expects to incur an approximate cost of $30 million and additional costs in 2022.
The Silvergate Bank, which is a subsidiary of Silvergate and Meta’s stablecoin partner, would move forward with integrating its payment platform, the Silvergate Exchange Network, with Diem’s assets. The new combination would assist the bank is launching a “next-generation global payment system” that is planned to be faster and easier to use in addition to being “more cost-effective than existing solutions.”
Alan Lane, Silvergate CEO, has stated that his team identified a need for a US dollar-backed stablecoin that can be regulated and is highly scalable for further enabling them to move money without barriers.
Lane assured it remains the company’s intention to satisfy that need through this launch of a stablecoin in 2022.
Meta had officially introduced its digital currency project in the year 2019, which was originally called Libra. It included a foundation of leading global companies such as Mastercard, Visa, PayPal, eBay and several others. The project back then had received massive global regulatory pushback as financial authorities expressed major concerns over the technological giants potentially exercising “too much financial power.”
Despite massive regulatory pressure, Meta had attempted rollout of some of its services in the United States, one of which was WhatsApp messenger payments testing with Meta’s Novi wallet in December 2021.
CEO Levey has said that in the United States, a senior regulator has informed Diem that it has been “the best-designed stablecoin project the US government had seen.”
While the Diem Association is reportedly wrapping its stablecoin, some of its original members are carrying forward with their own stablecoin plans.
Back in January 2022, PayPal had officially confirmed that it is currently “exploring a stablecoin” that could possibly be called the PayPal Coin.