The Meta group (parent company of Facebook
) has thrown in the towel and will sell its virtual currency project, for a time called Libra then Diem. He will not have resisted the regulatory pressures.
Mark Zuckerberg will not triumph. This controversial in-house cryptocurrency project, which he had vigorously defended before the United States Congress, is about to fall through for the Meta group. The Diem Association, launched in June 2019 under the name of Libra, will be sold for around 200 million dollars to Silvergate capital, a bank which was originally supposed to issue the famous crypto-currency.
Carp(head) Diem
Meta will have used all his cards, eventually going all-in, the pressure having been greater. If, initially, the virtual currency project had generated enthusiasm, with a promise of transparency, stability of the cryptocurrency and associated big names (Visa, Vodafone, eBay, Mastercard, PayPal), which in passing have quickly left the ship, the end will have been more tragic.
Very quickly, the Libra project encountered fierce opposition and provoked an almost international outcry, the heaviest of which was that raised arms in the air by the United States themselves, fearing that this virtual currency resulting from a GAFAM does not disrupt the financial system of the country and the rest of the globe. Central banks, policy makers and various regulators had joined the movement, raising the risks of money laundering and instability, among others.
In an attempt to woo regulators, Libra then changed its name to Diem, abandoning the idea of a cross-border virtual currency and leaving its Swiss headquarters, to focus solely on the US market and back the stablecoin to the dollar, thus revising its ambitions downwards.
A bank specializing in cryptocurrencies will recover the baby
Faced with opposition and after having suffered the refusal of the American central bank (the Fed), the Meta group has therefore recently considered the possibility of selling Diem’s assets. The goal would be to delegate the association while returning the capital to its investor members still present, according to several American media which evoke a source close to the file.
Meta would thus discuss with investment bankers to proceed with the sale of Diem’s intellectual property (and the patents that go with it) and offer ” a new home to the engineers who developed the technology.
Initially, Diem chose a subsidiary bank, Silvergate Bank, to issue the Diem USD stablecoin. Everything having fallen through, Meta (who owns a third of the association) decided to sell Diem to this friendly bank for 200 million dollars. No one knows what future Diem is now promised, who perhaps hopes, far from Meta, to redeem his virginity and eventually present a model that will calm the anxieties of regulators and other authorities.
Sources: Bloomberg
, The Wall Street Journal
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