Meta-backed ‘Diem’ cryptocurrency project reportedly falling apart

Meta-backed ‘Diem’ cryptocurrency project reportedly falling apart

Meta, previously known as Facebook, announced plans for its own cryptocurrency in 2019. The plan was to create a “stablecoin” — a cryptcurrency backed by the value of traditional currencies like the US Dollar — which could be easily sent through applications like Facebook Messenger or WhatsApp. However, those plans are reportedly falling apart.

Bloomberg reports that the Diem Association, the group of companies involved with the development and funding of the Diem cryptocurrency (which was called ‘Libre’ at first), is looking to sell off its assets. Diem is supposedly in discussions with investment bankers about how to sell its intellectual property and “find a new home” for the engineers working on the project.

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The website for the Diem Association says it aims to “build a trusted and innovative financial network that empowers people and businesses around the world.” The list of members on the about page includes Coinbase, Checkout.com, Lyft, Shopify, Uber, and Spotify.

Diem has encountered multiple setbacks over its short history. Mastercard, eBay, PayPal, Visa, and Stripe all left the group by October 2019, due to uncertainty about regulatory problems. That same month, Meta CEO Mark Zuckerberg was questioned by Congress members, in which he said, “if at the end of the day we [Meta] don’t receive the clearances, we will not be a part of the association.” David Marcus, a board member at Diem and head of Messenger and Novi at Meta, left both Diem and Meta in December 2021.

Bloomberg reports that Diem attempted to work with Silvergate Bank to distribute the US Dollar-backed coin, but after lengthy discussions with regulators, federal officials couldn’t assure the bank that it would allow it to distribute Diem. This left Diem without a way to issue its cryptocurrency.

Diem is reportedly still in the early stages of selling off its intellectual property, with no guarantee that it will find a buyer.

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Corbin Davenport
Corbin Davenport

Corbin is a tech journalist and software developer. Check out what he's up to at corbin.io.

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