The Diem Association confirmed on Monday that it will sell its Diem payment network assets.
According to the association, the decision was made as it “became clear” that federal regulators would not allow the project to proceed.
The end of the journey for Meta
During the announcement, the association said it would sell those assets to Silvergate, a cryptocurrency bank it worked with last year to launch a U.S. dollar-pegged stablecoin, for $200 million.
“We remain confident in the potential of a stablecoin running on a blockchain designed like Diem’s to deliver the benefits that have driven the Diem association from the start. With today’s sale, Silvergate will be well positioned to drive that vision forward,” said Stuart Levey, CEO of Diem Networks.
The sale marks the end of Meta’s controversial journey to build a new digital currency. The Diem association had been launched in 2019 with the aim of creating a global currency based on blockchain technology and a digital wallet on the same system.
Faced with regulators around the world
Almost immediately after its announcement, however, regulators around the world raised concerns about the privacy risks posed by the association’s digital currency and infrastructure.
Many supporters of the project, including eBay, PayPal, Mastercard, Visa and Stripe, then abandoned the payment network soon after.
Over the next three years, the association underwent a rebranding from Libra to Diem, while continuing to face the same kind of scrutiny from regulators. The Novi digital wallet then changed status to use USDP as its currency rather than the Diem Association stablecoin.
Along with the sale, Meta became a member of the Crypto Open Patent Alliance (COPA) on Monday and, in doing so, pledged not to enforce its core cryptocurrency patents, making the Diem Association’s patents free. accessible.
A new chapter?
Although Meta sold Diem’s core assets, former Diem Networks CEO David Marcus and its co-creator Christian Catalini both expressed on Twitter the hope that Silvergate, now responsible for the project, sees the regulatory pressure easing.
“It’s a new chapter, with a perhaps more ‘acceptable’ promoter to move the project forward,” hopes David Marcus.
“Today we are passing the baton to Silvergate. It was one of the first Federal Reserve member banks to understand the potential of cryptocurrency, and it is now in an excellent position to bring a stablecoin to market that follows the PWG framework,” adds Christian Catalini.
Source: ZDNet.com