Facebook’s digital currency venture Diem is reportedly winding down and selling off its tech to California-based Silvergate Capital.
The Diem Association is offloading its assets in a $200m deal with Silvergate Capital the Wall Street Journal first reported. Meta, the company formerly known as Facebook, first unveiled plans for Diem, previously called Libra, in June 2019, as part of an effort to expand into the crypto space with the launch of a digital currency.
The project has faced staunch opposition from policymakers globally amid concerns it could erode the control of central banks over the money system, enable crime, and raise privacy concerns.
Facebook founder and chief executive Mark Zuckerberg was even called before Congress to defend Facebook’s plan to bring financial services to the world’s underbanked with the launch of the stablecoin, an episode which spooked early investors.
In a bid to pacify critics, the Diem Association last year recruited Stuart Levey, a former U.S. Treasury official and top lawyer at HSBC Holdings PLC, as chief executive. Facebook even renamed its digital coin ‘Diem’ and scaled down its global aims to focus on the US market, announcing its digital currency would be pegged to the price of the US dollar. As part of its revamp, Facebook partnered with Silvergate which agreed to issue some of the stablecoins.
However, the project faced an additional blow when David Marcus, Facebook’s financial technology executive who was overseeing efforts to develop Diem, left the company.