The controversial cryptocurrency project that Mark Zuckerberg once defended in front of Congress is unraveling after regulatory pressure.<\/p>\n
The Diem Association, a cryptocurrency initiative once known as Libra backed by Meta Platforms Inc., is weighing a sale of its assets as a way to return capital to its investor members, according to people familiar with the matter.<\/p>\n
Diem is in discussions with investment bankers about how best to sell its intellectual property and find a new home for the engineers who developed the technology, cashing out whatever value remains in its once-ambitious Diem coin venture, said the people, asking not to be identified because the discussions aren\u2019t public.<\/p>\n
In 2019, when Meta\u2019s Facebook first unveiled the idea of its stable digital currencies —\u00a0stablecoins<\/a><\/strong>\u00a0— aimed at revolutionizing global financial services, they did so in collaboration with dozens of other companies.<\/p>\n But the consortium wasn\u2019t enough to protect the project from worldwide regulatory scrutiny.<\/p>\n After Zuckerberg was called to testify, some partners abandoned the project and it\u00a0changed<\/a><\/strong>\u00a0its name to Diem.<\/p>\n Diem\u2019s ambitions scaled back and its founder, David Marcus,\u00a0left<\/a><\/strong>\u00a0Meta last year.<\/p>\n The association struck an\u00a0arrangement<\/a><\/strong>\u00a0with Silvergate Capital Corp. to issue Diem, but resistance from the U.S. Federal Reserve dealt the effort a final blow, the people said.<\/p>\n Diem said in May that an affiliate of the firm, Silvergate Bank, was to be the issuer of the Diem USD stablecoin, a type of cryptocurrency pegged to the U.S. dollar that\u2019s typically used to buy and sell other crypto.<\/p>\n After a lengthy back-and-forth between the Diem advocates and regulators, Fed officials finally told Silvergate last summer that the agency was uneasy with the plan and couldn\u2019t assure the bank that it would allow that activity, the people said.<\/p>\n Without a green light from the bank\u2019s regulator, Silvergate was left unable to issue the new asset with confidence the Fed wouldn\u2019t crack down, and so the Diem effort had no coin.<\/p>\n A Fed spokesman declined to comment on the agency\u2019s talks with the Diem advocates.<\/p>\n The Diem Association declined to comment. Meta didn\u2019t immediately respond to a request for comment.<\/p>\n It\u2019s unclear how a potential buyer would value Diem\u2019s intellectual property, or the engineers that helped develop it.<\/p>\n Discussions are early, the people cautioned, and there\u2019s no guarantee Diem will find a buyer.<\/p>\n Meta owns about a third of the venture and the rest of it is owned members of the association, according to one of the people.<\/p>\n Association members, which include venture capital firms and technology companies, agreed to invest and pay to join when the group was formed, the person added. It\u2019s unclear which firms, besides Meta, ended up investing in the initiative.<\/p>\n Diem\u2019s website shows that its partners include venture capital firms such as Andreessen Horowitz, Union Square Ventures, Ribbit Capital, and Thrive Capital as well as Singapore state-owned investor Temasek Holdings Pte.<\/p>\n Its website also lists crypto-focused companies like Coinbase Global Inc., and others such as ride-hailing company Uber Technologies Inc. and commerce platform Shopify Inc.<\/p>\n In November, the federal watchdogs finally made it clearer what they were after. Stablecoin issuers should be regulated banks if the tokens are to be used as a means of buying and selling things, the President\u2019s Working Group on Financial Markets said in a report.<\/p>\n The group of regulators said they feared what might happen if a vast network of a tech company\u2019s users suddenly began transacting in a new currency, and that combining a stablecoin issuer with a big corporation \u201ccould lead to an excessive concentration of economic power.\u201d<\/p>\n The controversial cryptocurrency project that Mark Zuckerberg once defended in front of Congress is unraveling after regulatory pressure.\u00a0<\/p>\n","protected":false},"author":341034,"featured_media":398973,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[191,75982,161,59569,1767,40812],"class_list":["post-431508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-cryptocurrency","tag-diem","tag-facebook","tag-libra","tag-mark-zuckerberg","tag-meta"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/431508"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=431508"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/431508\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/398973"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=431508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=431508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=431508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Now read: Bitcoin sinks to six-month low<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"