It seems that Zuckerberg's dream of being able to integrate a cryptocurrency in your app portfolio it didn't last long, because it was in 2019 when we shared the publication here on the blog when it was made known the "Libra" project the cryptocurrency that pretended to have everything and at the same time nothing.
And a few days ago the Diem Association announced (on February 1) the sale of its intellectual property and other assets related to the operation of the Diem payment network to Silvergate Capital Corporation.
virtual currency was meant to make buying and sending money so easy and fast as an instant message. Mark Zuckerberg, the founder of the renowned multinational Meta, last year tried to convince decision makers.
“People pay too high a cost and have to wait too long to try to send money to relatives abroad. The financial sector is stagnant and there is no digital financial architecture to support the financial innovation we need. I think this problem can be solved and Libra can help," Zuckerberg said.
Libra burst onto the scene when stablecoins, which are designed to maintain a fixed price to encourage regular transactions, were a relatively new idea and not closely scrutinized by regulators.
Given the size of the stablecoin market since 2019, governments around the world are starting to take notice and consider legislation. In November, the US Treasury Department said it believes stablecoins should be regulated like banks.
The Libra Association was an independent non-profit association originally composed of 28 members and based in Geneva, Switzerland. Its purpose was to oversee important decisions regarding cryptocurrency.
Founding members included: MasterCard, Visa, Spotify Technology SA, PayPal Holdings, eBay, Uber Technologies and Vodafone Group Plc, as well as venture capital firms Andreessen Horowitz and Thrive Capital. In order to be part of the group, a minimum investment of $10 million was required, with the exception of non-profit members such as the financial inclusion group Kiva.
MasterCard left Libra due to concerns on compliance, monetization and Facebook interference in transactions, along with which after that several of the founding members ended up leaving the project. After that, the Libra association became Diemel after the departure of several important investors.
Because the project required the green light from regulators Americans, did not reassure the Federal Reserve. In question, the risks of a volatile currency like Bitcoin or the uncertainties about the protection of personal data the problems were on the rise for the project.
Trying to turn to a new page, the main assets of the Diem company ended up being acquired by Silvergate, a US commercial bank, to which Facebook said it wants to cut its losses.
The sale of Diem's assets marks the end of an effort which, in hindsight, was doomed from the start.
Facebook, now called Meta, created the apps that would have been the main way to use the token. Then, although Facebook created the Libra Association to manage the token alongside other companies, people immediately feared that Libra would make the controversial tech giant even more powerful. What's more, members of the Libra Association began to withdraw, just a few months after news of the group's formation was announced.
The association behind Diem has confirmed that it sold its assets for approximately $200 million. to Silvergate. The decision to sell was made after "it became clear from our dialogue with federal regulators that the project could not proceed," Diem CEO Stuart Levey said in a statement. (We already know that the US Federal Reserve was a key opponent of Diem's launch.)
For some analysts, Although Meta's reputation ultimately sank Diem, Diem's design was more transparent and friendlier. with regulators than many existing stablecoins. But with almost the entire founding team of Libra leaving Meta, the chances of Diem reappearing with the same level of support as before are slim.