Meta-backed stablecoin endeavour Diem to wind down

Meta-owned Facebook’s stroll in the digital currency market has come to an end with Diem – a stablecoin project funded by Facebook winding down and selling its assets to Silvergate.

Stablecoins refer to cryptocurrencies tied to a stable asset like the U.S. dollar, to help reduce volatility.

“With today’s sale, Silvergate will be well-placed to take this vision forward,” reads Diem CEO Stuart Levey’s comment on the sale. “Over the coming weeks, the Diem Association and its subsidiaries expect to begin the process of winding down, but we look forward to seeing the design choices – and the ideals – of Diem thrive.”

1/7 From the statement by the CEO Stuart Levey on the sale of the Diem group’s assets to Silvergate — “From the outset, the Diem project has been focused on leveraging the benefits of blockchain technology to design a better and more inclusive payment system. pic.twitter.com/fX9ptwDt0k

— Diem Association (@DiemAssociation) January 31, 2022

Diem says that the decision to wind down business comes after it was made clear by federal regulators that the project wouldn’t be allowed to move forward, quoting concerns about money laundering and other illegal activities.

While Diem wasn’t a project directly owned by Facebook, it did secure much of its funding from the social media giant, whose vision was to create apps like its Novi Wallet that would use utilize the Diem token. Nevertheless, it looks like Meta isn’t out of the game completely.

Stephane Kasriel, head at Novi said in a tweet, “At Meta, we’re continuing to execute on our existing fintech plans to create economic opportunities and champion greater financial inclusion today, and as we look ahead to the #metaverse.”

And despite the fact that Meta’s links to Diem have ended, there’s always the possibility that Silvergate will revamp and relaunch the project.

We hope that the Association’s sale of their assets to @silvergatebank will allow the project’s vision to live on. Because we still believe in the shared financial inclusion mission.

— Stephane Kasriel (@skasriel) January 31, 2022

Header image credit: Shutterstock

Source: Diem