Busy two years of hasty ending? Facebook will sell its cryptocurrency project Diem

Financial Associated Press (Shanghai, editor Xiaoxiang) news, two years ago, facebook, now renamed Meta Platforms, formulated an ambitious plan to enter the cryptocurrency field, but now this plan is not half of the business, has declared a "middle road collapse" .

According to people familiar with the matter, Facebook's cryptocurrency project, the Diem Association, will face liquidation and will sell its technology to Silvergate Capital Corp., a small California bank serving bitcoin and blockchain companies, for about $200 million.

The bank had previously reached an agreement with Diem to issue stablecoins, which was at the heart of Facebook's plan aforementioned.

Analysts point out that the sale represents facebook's efforts to squeeze out some of the last remaining residual value from the project.

Diem's "Past and Present Lives"

As much as it is now committed to carving out a new ground in the metaverse, Facebook was confident when it first unveiled its Libra plan for the dollar stablecoin project in June 2019, when Facebook touted it as a payment method for the billions of users of the social network that would eventually be as convenient as sending text messages.

Libra also invited well-known partners in e-commerce and payments, such as PayPal, Visa and Stripe, to jointly develop a digital token pegged to multiple currencies and short-term government bonds. This is partly to show support for the financial industry, and on the other hand to downplay the existence of Facebook itself, which faces many questions about regulating its platform.

Even so, Libra faced a lot of resistance at the beginning of its existence, and such a strong alliance was still not enough to exempt the project from regulatory scrutiny around the world. Officials have expressed concern about Libra's impact on financial stability and data privacy, and concerns that it could be misused by money launderers and terrorist financiers. Even Fed Chairman Jerome Powell said the Fed was seriously concerned about it.

When Zuckerberg was called to the U.S. Congress for a hearing, some partners withdrew. In 2020, the group hired Stuart Levey, a former U.S. Treasury official and lead attorney at HSBC Holdings Limited, as CEO and dropped the Libra name in favor of Diem.

But then things continue to deteriorate. Last year, Diem moved its main business from Switzerland to the United States and withdrew its application for a payment system license to Swiss financial regulators, further reducing the size of the project to focus on a digital currency that is only supported by the US dollar to appease regulators. Facebook executive David Marcus, who also left the company last year, was responsible for the launch of Diem's products.

Facebook currently owns about a third of Diem's shares, with the rest owned by members of the alliance, including venture capital firms and tech companies, people familiar with the matter said.