Following multiple rebrands and congressional hearings, as well as a number of notable staff resignations the Meta-backed cryptocurrency, also known as Diem has decided to end its run. Diem’s association behind Diem confirmed on Monday that it had sold its assets worth approximately 200 million to Silvergate, a bank that focuses on crypto. that it worked with last year on the launch of stablecoins that were tied against the U.S. dollar. This decision came following the fact that it “became evident from our discussions of federal authorities, that this project would not be able to go ahead,” Diem CEO Stuart Levey stated in the press release. (It’s well-known that Diem was a target of the U.S. Federal Reserve was one of the main opponents to Diem’s launch.)
Diem’s assets have been sold. This is the conclusion of a project which, in retrospect was doomed from the beginning. The disposal of Diem’s assets signals the conclusion of an endeavor which, in hindsight was doomed from the beginning. Facebook which is now owned through Meta has created the applications which were the primary method of using the token. This is why, even though Facebook established its Libra Association to manage the token in conjunction with other companies, many were immediately concerned that Libra could increase the power of the tech giant much more powerful. Additionally, those who belong to the Libra Association started to drop out just a few months after the organization was made public.
Libra was also on the scene after stable coins, designed to have a fixed price to promote frequent transactions a novel concept that was not examined by regulators. Because of how large the market for stablecoins has become in the last year, governments across the globe are beginning to pay attention and look at the possibility of legislation. In November officials from the US Treasury said it thought that stablecoins should be subject to the same regulations as banks. In addition, Barron’s recently published on there is a plan by the White House is planning to require federal agencies to oversee cryptocurrencies in the interest of national security.
Although Meta’s ties with Diem are now over there is always the possibility that Silvergate or a different player will revive Diem as a project. Although Meta’s reputation eventually was a disaster, however, Diem’s design Diem was more transparent and regulated than the majority of stable coins. However, with the majority of Libra’s founding team departed from Meta The odds of Diem ever returning with the same backing that it once enjoyed appearing to be slim.
It’s obvious that at the very minimum, several of the founding leadership of Libra are disgruntled by the way the project was delegitimized. David Marcus, the former Facebook executive who founded Libra and left at the end of the year, tweeted this regarding Diem closing down:
One bright side to Diem’s end has to do with the fact Meta has said it will not apply its wealth in cryptocurrency patents to other creators — something could even Jack Dorsey thinks is an excellent idea.
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