Meta officially confirms the shutdown of its stablecoin project Diem

February 01, 2022

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After years of considerable efforts to move forward with the idea, Meta, formerly known as Facebook, has officially declared the termination of its global digital currency project Diem.

Meta is selling intellectual property and other assets in relation to the stablecoin project to its Silvergate Capital Corporation, according to Diem CEO Stuart Levey, who announced the decision on Monday.

According to Silvergate’s official release, the company would purchase Diem’s assets for a total of $182 million. “As part of integrating the acquired assets into Silvergate’s existing technology, Silvergate expects to incur approximately $30 million of additional costs in 2022,” the company stated.

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Silvergate Bank will integrate Diem’s assets into its payment network, the Silvergate Exchange Network. According to the release, the new partnership will enable the bank to establish a “next-generation global payment system that is faster, easier to use and more cost-effective than existing solutions.”

Diem to shut down in a few weeks

Levey said that the Diem Association and its subsidiaries would begin shutting down activities “in the coming weeks.” Even when Meta formally ended its engagement in the project, the association is optimistic that the acquired company’s ideas would thrive, according to the CEO:

“We remain confident in the potential for a stablecoin operating on a blockchain designed like Diem’s to deliver the benefits that motivated the Diem Association from the beginning. With today’s sale, Silvergate will be well-placed to take this vision forward.”
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Meta first announced its digital currency initiative, called Libra, in 2019, with a foundation of prominent multinational companies such as Mastercard, eBay, PayPal, Visa, and others. The proposal was received with great regulatory resistance around the world, with financial regulators voicing grave fears about tech firms gaining too much financial power.

Despite significant regulatory pressure, Meta sought to launch some of its services in the United States, with Meta’s Novi wallet being tested by WhatsApp Messenger in December 2021.

While the Diem Association wraps up its stablecoin, some of its founding members are pressing forward with their own plans for a stablecoin. PayPal stated in January that it is exploring a stablecoin that may be called PayPal Coin.