Meta (formerly Facebook) Platforms-led company called Diem Association has sold its technologies to Silvergate Capital for $200 million, according to The Wall Street Journal. It was planning to launch a fresh client-based stable coin.
In 2021, the Californian bank that supports blockchain startups decided to collaborate with Diem on the creation of a USD stable coin. The deal was expected to inject new life into a dormant venture that Meta Platforms originally launched using the moniker Libra three years ago.
On 25/01, Bloomberg claimed that Diem had been in talks with financial advisers to transfer its intellectual assets to refund revenue to creditors.
The proposal planned to adopt a stable coin that could be used for trading worldwide, endorsed by a portfolio of fiat currencies. It was previously called Libra. However, it sparked a global regulative response. Politicians insisted that all developments be halted till they could offer statutory direction. They also raised questions about the guarantee of economic security.
The Libra Association restructured as Diem at the end of 2020 to adopt a new strategy. But the venture persisted amid challenges, such as the resignation of senior shareholders.
Silvergate will be the official holder of the Diem stable coin based on U.S. dollars and maintain the assets supporting the currency. Diem Networks U.S. will administer the Diem Transactions System and operate as a monetary operation firm with the FinCEN.
However, the Federal Reserve of the United States raised reservations regarding the concept and did not promise that it will be approved. A similar case happened against Novi last autumn