Meta's foray into cryptocurrency through its proposed digital currency, Diem (formerly Libra), is officially over.
Stuart Levey, Chief Executive Officer, Diem
The dollar-funded Diem Association, formed to run the project, sold its intellectual property and technology assets related to its "blockchain-based payment network infrastructure" to San Diego-based Silvergate Capital for $182 million.
In announcing the sale, Diem CEO Stuart Levey said that while the program was intended to be a more inclusive payments system, "our conversations with federal regulators quickly made it clear that the program could not move forward."
Following the acquisition, Silvergate said it intends to launch a stablecoin in 2022, "powered by the assets we acquire today and our existing technology."
The Facebook-funded stablecoin, which launched in 2019 under the moniker Libra, has been resisted by regulators and lawmakers from the start.
But the Diem project is likely to live on through its influence on the broader debate around stablecoins, cryptocurrencies and blockchain technology, particularly as they relate to financial inclusion and concerns about fraud and criminal activity.
Diem CEO Levey added that one of the Diem team's "highest priorities" is to establish controls to protect it from abuse by illegal actors.
"We have addressed this issue in a novel way for the industry, implementing a number of controls that are considered innovative by regulators," he said, including a ban on anonymous trading.
"In the U.S., a senior regulator told us that Diem is the best designed stablecoin project the U.S. government has ever seen," Levey gushes.
Christian Catalini, the last person still involved in the initial Libra phase after the sale of Diem, said the initial white paper "may have been ahead of its time" but was also responsible for moving the public sector forward on central bank digital currencies (CBDC).
Catalini said that stablecoins like Diem "were never the end goal, and with CBDC we may see the rise of truly open, interoperable public infrastructures that can support competition in the payments and financial services space.
After the signing, Levey said the team remains "confident in the potential of running a stable coin on a blockchain designed like Diem to provide the benefits that have motivated the Diem Association from the beginning.