According to reports, the Diem Association, a digital currency project, issued a statement confirming the sale of its intellectual property and other payment network-related assets to Silvergate Bank, a California-based chartered bank.
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
The Meta-initiated effort to make payments and transfers cheaper and faster has stalled amid resistance from federal regulators, the association said in its statement. The association will phase out as the deal progresses, the statement said.
Bloomberg previously reported that the sale may be valued at $200 million, but the amount has not yet been disclosed.
In June 2019, Facebook released a digital cryptocurrency called “Libra”. Libra was originally planned to be officially launched in 2020 and is expected to provide digital transaction and payment services to billions of potential users.
But then, many central banks, finance ministers, lawmakers around the world, and many privacy protection agencies around the world have questioned Libra and listed multiple issues related to Libra, including money laundering, terrorist financing, and financial stability.
In April 2020, the Libra Association announced an adjustment to the Libra project, which will support multiple versions of digital currencies, namely “stable coins” backed by a single currency. By contrast, Facebook’s original plan was for Libra to be backed by a basket of currencies (USD, EUR, JPY, GBP, and SGD) and government debt.
In December 2020, Facebook renamed “Libra” to “Diem”. At the same time, the “Libra Association” responsible for launching and operating the digital cryptocurrency was also renamed the “Diem Association”. The report said the name change was intended to emphasize the project’s independence and thus gain regulatory approval.
As a last-ditch effort, Facebook compromised again in May last year, announcing that it would move Diem’s main business from Switzerland to the United States. At the same time, Facebook also announced a strategic cooperation with Silvergate Bank, which will become the exclusive issuer of Diem’s USD stablecoin and will manage Diem’s USD reserves.
Still, the project has failed to gain approval from U.S. regulators. Late last year, the project’s founder, David Marcus, left Facebook.
The sale, when completed, will bring Facebook its largest sum of money.