Mark Zuckerberg’s stablecoin project hits dead end

Mark Zuckerberg’s Meta has planned on launching their own cryptocurrency called Diem. Now, all Diem assets are already sold to Californian bank holding company Silvergate Capital.

With the increasing demand for cryptocurrencies, several people have planned on creating their digital assets. By seeing the advantages of using crypto especially when playing Bitcoin casino games, even multi-billionaire Mark Zuckerberg has planned on launching one called Diem. Due to several issues that the project faced, all Diem assets were now sold to Silvergate Capital.

This was confirmed by the Silvergate and Diem Association. Meta, so far, still hasn’t issued an official statement about the sale. According to several reputable reports, the value of the sale ranges around $200 million. It is believed that this comes shortly after regulators, including the Federal Reserve, opposed the said project.

In 2021, the Federal Reserve and the developing team of Meta and Diem held several meetings about the said stablecoin project. However, it was later revealed that Meta and the Diem team were told that the project will no longer move forward. 

Regulators and politicians opposed the idea because it is backed by Meta which has several issues. This is highly crucial, especially if they get involved with the global financial system.

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Diem’s future possibilities

Last February 1, Diem co-creator Christian Catalini posted a 13-part Twitter thread that confirmed the asset selling of Diem. It also emphasized how Silvergate might still push through with the plan to launch it as a stablecoin. Some of his tweets read: 

‘Today we passed the baton to Silvergate. They have been one of the first Federal Reserve member banks to understand the potential of crypto, and are now in a great position to bring a stablecoin to market that follows the PWG framework’.

‘I'm extremely excited to jump back into crypto. This space is as exciting as it has ever been, and we are very far from realizing its potential when it comes to unbanked segments of society and increasing competition in digital platforms. My hope is that the Libra/Diem journey, research papers, and open source code will be useful for entrepreneurs and developers writing the next chapter of crypto’, he added.

Aside from Catalini, former Facebook executive and another Diem co-creator David Marcus also posted on his Twitter account. In his tweet, he congratulated his former colleagues and friends as well as Silvergate bank. He also talked about how passionate their team was about the Diem project which they will always regard as Libra.

‘Here's to yet another chapter with a maybe more "acceptable" promoter driving the vision forward. There will be ample time in the future for me to properly reflect on the behaviour of certain politicians and regulators along the way, but for now... onward!’, he added in another tweet.

The cryptocurrency project started in 2019 and was originally called the Libra project. Its main objective was to be a stablecoin based on a basket of national currencies. Upon receiving backlash, the initiative was scaled back. Then, in 2020, the company changed its name to Diem.

In May 2021, the Diem Association, which comprised Facebook and 25 other companies at the time, teamed up with Silvergate Capital Corporation to launch a stablecoin backed by the dollar. Although there are already several stablecoins in the market, Diem was already fighting an uphill battle with the regulators even though it wasn't officially launched yet.

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Words: Kyra Jimenez