The once groundbreaking project, now known as Diem, is being sold by Meta (formerly Facebook) to Silvergate Bank. It’s the end of a nearly three-year effort for a novel solution open to 2 billion potential users.
This is the end of Diem
Diem, formerly known as Libra, is coming to the end of its life. This is happening while it is still in the design phase which has been ongoing since June 2019. On the last day of January, Diem’s association announced that it would begin a liquidation process in the next few weeks, which would involve the group as well as its subsidiaries.
However Silvergate is still very interested in the stablecoin aspect, and decided to take over Diem completely. This information was revealed on the same day. From the official statement we learn that Silvergate is acquiring the development, implementation and operational tools belonging to Diem, as well as any blockchain-based tools and payment systems created to date.
Silvergate issued $132 million in Class A shares to acquire the aforementioned assets, and paid an additional $50 million in cash. To quote the bank’s CEO Alan Lane:
“We are committed to continuing to support the open-source community that is building this technology, and we believe that current contributors will be excited about our vision going forward.”
According to him, there is a strong need for a stable dollar-based cryptocurrency that is both regulated and highly scalable. Based on Diem, the new project is expected to go public by the end of the year.
A brief history of Diem
Diem’s story is not only short, but also bumpy. Initially, the project was called Libra and was a real revolution for the stablecoin world. First of all, from the very first day of its existence, it was supposed to be open to the 2 billion users behind the social networking platform Facebook. Created on behalf of Mark Zuckerberg, the coin was to be secured with its own blockchain and be covered by bank deposits, as well as gold and silver, among others. Unfortunately, at its very foundation, Libra was bombarded with regulations in the United States, as well as in the leading economies of the European Union. Libra’s subsequent rebranding to Diem and a change in the premise that the coin would be based primarily on the value of the dollar was also not accepted by governments.
Was it because of Facebook’s size and potential threat to traditional finance? Or perhaps it was concern for the target user or the distaste that the Diem authorities left with regulators who learned about the venture from the media? We will likely never know.