The controversial digital currency project by the company Meta (formerly Facebook) may be about to end before it has even been launched.
According to a Bloomberg report, the Diem Association, formerly known as Libra, is in talks to sell its assets and return capital to investors.
Project members include some of the world’s largest technology companies and investors, such as Uber, Spotify, Coinbase and Ribbit Capital. However, it is unclear which members of Diem actually invested in the project.
Sources told the news agency that the association is in discussions with investment bankers to understand how best to sell their intellectual property and find a new home for the engineers who developed the technology.
This would put an end to the Facebook owner’s ambitious stablecoin project. As highlighted by the sources, who asked not to be identified, discussions are ongoing. But there is no guarantee that Diem will find a buyer.
Also according to Bloomberg, Meta owns about a third of the venture. The remainder belongs to association members, who agreed to invest and pay to participate when the group was formed.
On Diem’s website, venture capital firms such as Andreessen Horowitz, Union Square Ventures, and Thrive Capital, as well as Singaporean state investor Temasek Holdings Pte and the aforementioned companies, are listed as partners.
The first time Facebook revealed its plans to launch its own cryptocurrency, Libra, and revolutionize global financial services was in 2019. At the time, several large corporations were interested in the project and a consortium was created.
However, the initiative suffered from regulatory pressures. Global entities have expressed concern about the impact of digital currency on financial stability. In addition, they highlighted that Libra could affect monetary policy and threaten privacy. Mark Zuckerberg was even called to testify about Libra.
After that, several companies abandoned the project, including Visa, Mastercard, eBay, Stripe and several others.
So, in December 2020 the project was reformulated. He changed his name to Diem, with much smaller ambitions, in an effort to get the regulatory approval he’s been dreaming of.
The idea was for Diem to be a stablecoin backed only by the dollar, instead of being backed by a basket of fiat currencies such as the dollar, euro, yen, as was envisaged in the Libra project.
But Diem started to unravel – if it ever did – when its founder, David Marcus, left Meta in 2021.
At the time, he claimed he was leaving the organization to pursue other business interests. But some experts already claimed that the departure signaled the end of Diem.
Now, it remains to be seen whether the association will be able to sell its assets and repay investors who believed in Diem.