After more than two years of development, the Facebook-backed Diem Association (formerly known as the Libra Association) is being wound down. According to Bloomberg, the association backed by Mark Zuckerberg in order to launch a stablecoin cryptocurrency, will sell its assets to Silvergate, the bank that had previously partnered with the group.
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Though the Diem Association was a separate organization from Facebook and parent company Meta, much of its funding came from Facebook. “I believe that this is something that needs to get built, but I get that I’m not the ideal messenger for this right now,” Zuckerberg told Congress in a 2019 hearing about his cryptocurrency ambitions.
The original plan was to launch the cryptocurrency, tipped to be called Libra, at the beginning of 2021. This timeline was obviously not met, with the group running into massive roadblocks from lawmakers and regulators around the globe. Among officials’ top concerns was that Diem could be used for money laundering and other illicit purposes.
“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead,” Diem CEO Stuart Levey said. “As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”
Facebook also has a digital crypto wallet in the works, called Novi, and it is still unclear what will happen to that project. It launched as a “small pilot” in 2021 and was able to store the Pax Dollar stablecoin. At the time, Facebook’s former crypto chief David Marcus said the company remained committed to launching Diem. Marcus left the company a month later. Facebook didn’t immediately respond to a request for comment.
