Technology

Crypto: Facebook’s Diem (ex-Libra) project is desperately looking for a buyer

The Diem association, which is piloting the digital currency project envisioned by Facebook, would discuss with investment banks, according to Bloomberg.

“Facebook will not launch Libra anywhere in the world until all US regulators have approved it,” Mark Zuckerberg hammered during his hearing before the elected officials of the US House Financial Services Committee. in October 2019. Four years later, it seems that this digital currency project, which has been renamed Diem, will finally not launch anywhere.

According to Bloomberg, citing a source familiar with the matter, the Diem association – responsible for piloting the construction of the blockchain-based payment system – has entered into talks with investment banks to sell the project’s intellectual property and re-employ it as best as possible. . the engineers working on it. This sale would allow investors who had initially bet on the Libra project to be reimbursed, including Facebook, renamed Meta since last year.

many exits

The resignations in 2021 of David Marcus, the great original architect of Libra, and of several key people in the digital currency project, had already sealed the end of an ambition. Since its announcement with great fanfare in June 2019 and the panic generated among financial regulators around the world, the Libra project has continued to revise its scope downwards. Several prestigious partners (Visa, Mastercard, Stripe, Mercado Pago) had left the ship in the fall of 2019.

Rebranded as Diem, the project was first reduced to a set of stablecoins (a digital currency pegged to the dollar, euro, British pound, etc.), then a second time to a dollar stablecoin. In May 2021, the Diem association left its headquarters in Geneva for the United States and withdrew its application for a license as a payment system with the Swiss Financial Market Supervisory Authority (FINMA).

However, to focus solely on the US market, Diem continued to rely on the green light from regulators. In May, the Diem association also explained that it had partnered with Silvergate Bank, a bank specializing in crypto assets, which would have become the exclusive issuer of the Diem US stablecoin.

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resistor fed

But all this was not enough to raise the resistance of the US Central Bank (FED), which would have dealt the final blow to the project according to the source cited by Bloomberg. Despite the back and forth between its lawyers and the regulator, the Diem association would not have had the security of being able to launch its coin, as the Fed was not comfortable with the project, according to the agency. Neither the Fed, the Diem Association nor Meta commented.

It remains to be seen how a potential buyer might value Diem’s ​​intellectual property or rehire the engineers who worked on the infrastructure. According to Bloomberg, the discussions are only at the beginning and there is great uncertainty about the outcome.

The initial investments are divided between Meta and the twenty members of the Diem association (including Coinbase, Anchorage, Uber, Lyft, Iliad, etc.). Everyone had to pay an entrance ticket (a minimum of 10 million dollars) to be part of the adventure.

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