The Diem Association, the Meta Platforms (formerly Facebook)-led group seeking to create a stablecoin, is considering the sale of the project’s assets to return money to investors, Bloomberg reported on Tuesday, citing unnamed sources.
The group has been speaking with investment bankers about selling Diem’s intellectual property and helping the developers of Diem technology find new places to work, Bloomberg reported, citing its sources.Meta CEO Mark Zuckerberg had high hopes for the cryptocurrency, defending the vision of the project before a congressional hearing, but the initiative has had a rocky journey since its unveiling in June 2019 as the Libra Association.In December 2020, the Libra Association rebranded as Diem to distance itself from its original goals.Originally, the project envisioned a stablecoin backed by a basket of fiat currencies, one that could be used worldwide as a means of exchange. It immediately prompted international regulatory backlash, with lawmakers demanding that all development cease until they could better understand it, provide some level of regulatory oversight and ensure there were no risks to financial stability.In May, Diem said it would be partnering with Silvergate Bank to launch a U.S. dollar-pegged stablecoin. Diem Networks U.S., a subsidiary of the association, would run the Diem Payments Network and register as a money services business with the Financial Crimes Enforcement Network (FinCEN), while Silvergate would be the formal issuer of the diem USD stablecoin. Silvergate would also manage the reserve backing the token.Novi (formerly Calibra), a Meta subsidiary focused on building a wallet that would be compatible with Diem, announced a pilot program in partnership with Paxos last autumn. Lawmakers pushed back against even this scaled-down project.But the Federal Reserve expressed concerns about this plan and wouldn’t guarantee that it would give its approval.Last November, Libra project creator David Marcus announced he was leaving Meta.