Diem would probably never see the light of day. Cornered by financial regulators, the Association Diem, to whom Facebook has entrusted the project, would not be able to launch the cryptocurrency after two years of development.
In mid-2019, Facebook (since renamed Meta) announced the launch of its own cryptocurrency. The project, initially called Libra, quickly grew hit a host of regulatory hurdles. To calm financial regulators, who fear Facebook’s hold on the power of monetary creation, the social network has distanced itself from the project.
The development of Libra, now Diem, was entrusted to an independent entity, Diem Association. For a time, the project evolved despite threats from the financial police. The association has also developed a digital wallet to store and exchange the stablecoin, a digital currency whose price is stable. A first test of the wallet has been initiated in the United States and Guatemala but without Diem. The application only allowed free exchange of Pax Dollar, a stablecoin regulated in the USA.
Towards the end of Diem?
Despite these encouraging signs, David Marcus, the project manager since its genesis, decided to jump ship last December, raising fears of the worst for Diem. According to our colleagues from Bloomberg, the project is indeed about to fall through.
Citing people familiar with the matter, the Association Diem would consider return the capital to its investors by reselling all of its assets. As a reminder, the stablecoin project has renowned investors such as Uber, Shopify and the Coinbase cryptocurrency exchange platform.
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This resale would sign the abandonment of the development of Diem. “Diem is talking to investment bankers about how best to sell his intellectual property and find a new home for the engineers who developed the technology.”says Bloomberg in its report.
Regulators are increasingly interested in the subject stablecoins, which they see as an uncontrollable alternative to traditional fiat currency. A few months ago, the United States central bank banned Silvergate, an American bank, from issuing the token developed by Facebook teams.
Source: Bloomberg
