Posted Feb 1 2022 at 8:43 amUpdated Feb 1. 2022 at 9:39
It won’t be this time. As expected, the digital currency project of Meta (ex-Facebook) was officially abandoned on Monday. Launched with great fanfare in 2019 under the name of Libra, it was to offer a new method of payment outside traditional banking circuits. Objective: to make it possible to buy goods or send money as easily and quickly as an instant message.
But he quickly raised an outcry from central banks, regulators and policy makers alike. Among the fears mentioned were the risks to the stability of the financial system, the fight against money laundering or problems related to the protection of personal data.
Faced with these concerns, but also the defection of several major partners such as PayPal, Visa and Mastercard, the organization had quickly revised its ambitions downwards and amended its project. Renamed “Diem”, its management had been entrusted to an independent entity, based in Geneva (Switzerland).
Dismantling “in the coming weeks”
That won’t be enough. “It had become clear during our discussions with the American authorities that the project could not advance further,” lamented the director general of the association, Stuart Levey, in a press release. “The best way forward was to sell the assets of the Diem group,” he concluded, adding that the association and its subsidiaries would begin to dismantle “in the coming weeks.”
As expected, the bank Silvergate Capital Corporation, a partner of Meta in cryptos, has acquired the intellectual property rights and other assets of Diem. She will pay $50 million in cash and donate about 1.2 million new shares to Diem for a total amount equivalent to $182 million, she said. With Diem’s assets, the California-based group notably wants to improve the infrastructure it already has in place for its own “stablecoin” project, a stable digital currency backed by the dollar.