Following its scrutiny in front of the US Congress and regulatory pressure, it seems that Meta Platforms (Nasdaq: FB) CEO Mark Zuckerberg is looking at the likely decline of his cryptocurrency project Diem Association. The initiative is rumored to seize the remaining opportunity by selling its assets instead.
According to a Bloomberg report, the Diem Association is apparently in talks with investment bankers “about how best to sell its intellectual property and find a new home for the engineers who developed the technology.” The people familiar with the discussions said the initiative plans to cash out the remaining value out of the venture.
Meta owns a third of the venture while the rest is owned by the members of the association. Initially named Libra, the cryptocurrency effort aims to introduce stable digital currencies, forming a consortium with other companies. However, the announcement faced scrutiny from regulators and legislators, ending up with Zuckerberg being called to testify in a US Congress hearing.
After changing its name, the venture’s idea is to issue the stablecoin Diem USD, pegged to the US Dollar. The initiative tapped Silvergate Bank in May 2021 to issue the coin venture, but the move faced resistance from the US Federal Reserve. It now remains in limbo as the bank is unable to release the digital asset without facing a potential regulatory conundrum.
In October 2021, the Biden administration announced that it is considering installing bank-like regulations on companies that issue stablecoins.
Meta Platforms’ messaging app WhatsApp piloted in December 2021 its crypto wallet Novi that will enable sending digital coins through chats. The effort is so far limited to the stablecoin Pax Dollars issued by Paxos.
Information for this briefing was found via The Verge and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.