Diem throws in the towel, the stablecoin dreamed of by Facebook will not be made
The payment system based on blockchain and on a new stablecoin will be sold to Silvergate, a bank specializing in cryptocurrencies, for 200 million dollars.
Posted on 01 February 2022 by Valentina Bernocco
Meta’s cryptocurrency dreams are extinguished altogether, at least for the time being. The news almost goes quietly, while in 2019 Libra, the stablecoin designed by Facebook, had occupied the news, when the Menlo Park company was still called this: announced with great fanfare, with great mobilization of alliances in the world of payment services. (from PayPal to Visa), telco (Iliad and Vodafone Group) and digital services (such as Uber, Lyft, Booking, Spotify), should have created a new global platform for purchases and money transfer, deeply integrated with the social network.
Facebook had also created a foundation and a subsidiary company, Calibra, planning the launch of the service for the fateful year 2020, when the covid had not yet appeared on the scene. It was not, however, the pandemic that hindered the projects of Facebook, now Meta.
Political institutions and the banking sector immediately expressed concerns, due both to the not immaculate reputation of Mark Zuckerberg’s social network in terms of data processing (think of the Cambridge Analytica case) and to the absence of a legislative framework to protect consumers. and financial markets. In particular, the privacy guarantors of various countries and the European Data Protection Supervisor, Giovanni Buttarelli, in a joint document underlined the pending risks on the data, financial and otherwise, of hundreds of millions of users.
At the end of 2020, the Libra Association had changed its name to Diem Association to underline its willingness to act as a payment system independent of the control and interests of Facebook. Today another chapter is written in this failure story: for the price of 200 million dollars, the Diem Association will sell the assets related to the payment system to Silvergate, a bank focused on cryptocurrencies.
The managing director of the Diem Association, Stuart Levey, in a written statement stressed that “one of our highest priorities, in designing the Diem Payment Network, has been the construction of controls to protect against misuse by illicit actors” . Nonetheless, at a certain point “it became clear, based on the dialogue with federal regulators, that the project could not continue”.
“We remain confident”, continued Levey, “in the potential of a stablecoin operating on a blockchain designed like Diem’s, capable of offering the benefits that motivated Diem Association from the start. With the sale, Silvergate will be well positioned to pursue this vision. ” In the coming weeks, Diem Association and its subsidiaries will finish dismantling what remains of their businesses.