Facebook’s stablecoin project, Diem, is coming to an end after months of development. On Monday, Silvergate Bank announced that it had acquired $182 million worth of Diem assets from the tech firm.
Diem CEO Stuart Leve spread the news with a statement:
“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead. As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”
Silvergate Bank buys Diem assets from Facebook for $182 million
Facebook’s plan for Diem—then known as “Libra”—began rolling out in the summer of 2019 with the objective of building a “simple global payment system and financial infrastructure that empowers billions of people.” However, because this is a Facebook brand, most people were hesitant; regulators from the EU and the United States alike expressed doubts about the initiative, with Europe’s antitrust watchdog launching an investigation into it not long after it was first announced.
Following months of regulatory scrutiny, certain of the project’s early investors, such as PayPal, Mastercard, and Visa departed. The name was changed first, followed by a reduction in scope: originally intended to be a globally supported cryptocurrency, it has since been restricted to operating in the United States because it failed to obtain Swiss payment authorities’ approval.
The mission to become the de-facto payment system for the internet was abandoned less than a year after it began. Following the launch of Facebook’s cryptocurrency project, several key executives departed the company. David Marcus, who was in charge of overseeing Diem’s push into the mainstream, left shortly after.
Facebook’s Novi blockchain wallet announced towards the end of last year that it would be trialing payments using Pax Dollars (USDP) rather than Diem, as initially intended.
On the same day as Diem’s demise, Facebook announced the closing of yet another controversial initiative: its Express Wi-Fi project, which had been providing low-cost internet services to areas in India, Indonesia, and other regions of the global south for the past six years.
Regulators in other nations were critical of the wi-fi project, with countries like Bangladesh banning the program from establishing operations in rural areas due to security and licensing issues.
Meta announced the news with a blog post:
“Together with our partners, we helped expand public Wi-Fi access for people in more than 30 countries via the Express Wi-Fi platform. While we are concluding our work on this program to focus on developing other projects, we remain committed to working with partners across the telecom ecosystem to deliver better connectivity.”