Diem, Facebook’s cryptocurrency, seems to have its days numbered

In June 2019, Facebook proposed a revolution: Zuckerberg announced his Libra cryptocurrency and painted a future in which we would pay our Facebook, Messenger and WhatsApp contacts with this digital currency.

The project, however, never came to fruition. Regulators didn’t like the idea, and Facebook (now Meta) had to downgrade their ambitions and change the name of the project to Diem. Not even that was enough, and now sources close to the company indicate that Meta is trying to sell that division to get rid of Project Diem, who has a difficult future.

The Meta stablecoin never really caught on

The cryptocurrency was a ‘stablecoin’, a virtual currency that would theoretically keep its value stable this being always closely linked to that of a state currency such as the US dollar. Diem was expected to appear in January 2021, but that never happened.

The initial partners of the Libra project they were abandoning the ship shortly after the initiative was announced. One of the reasons was the emergence of the privacy scandals surrounding the company at the time, which caused Facebook to decide to change focus and rename the project to Diem.

Those responsible for the project indicated in May of last year that a company affiliated with it, Silvergate Bank, would be the one who would issue the stablecoin Diem USD, but regulators were not comfortable with the idea and they made it clear that they did not know if they would give the go-ahead for such activity. Silvergate ended up not making a move, and Diem remained in limbo.

Now sources close to the project indicate that Meta (before Facebook) is trying to sell the resources and assets of Project Diem. That would be an unequivocal sign that Zuckerberg’s company would abandon a proposal that was shaken by the departure of David Marcus, head of the idea and who left Meta last year along with a good part of the founding team of the Libra project.

Via | Bloomberg