- The Diem Association is exploring ways to sell its assets, per a Bloomberg report.
- The stablecoin project has weathered regulatory scrutiny and executive departures.
Diem Association (formerly known as Libra Association), the stablecoin project started by Meta (formerly known as Facebook), may soon be known as “abandoned.”
The association—led by Facebook and a smattering of financial firms, venture capitalists, and aid organizations—is contemplating selling off its intellectual property and other assets “as a way to return capital to its investor members,” according to a report by Bloomberg.
Any sale, which has not been confirmed by Diem or Facebook, would likely spell the end of Facebook’s cryptocurrency ambitions, at least in the short term.
Announced in 2019 to both fanfare and confusion, Libra was meant to be a stablecoin tied to a basket of global currencies. The coin’s construction meant that rather than mirroring the value of the U.S. dollar, as Tether or USDC does, Libra could almost become its own global currency—managed by the Libra Association.
U.S. regulators weren’t thrilled. Within months, pressure from regulators and lawmakers caused prominent Libra Association members to bail on the project. In a single day in October of that year, eBay, Stripe, Mastercard and Visa all resigned as founding members, following PayPal’s lead the week before.
Facebook stuck with it. It rebranded the project to Diem, scaled the ambitions down from a dollar rival to a dollar-based stablecoin, and went so far as to release the Novi crypto wallet—but as a wallet to hold Paxos Dollar (USDP) rather than the Diem stablecoin.
Though Diem had initially secured crypto bank Silvergate to issue the coin, the Federal Reserve threw cold water on that plan, hardly surprising given that U.S. regulators such as the Securities and Exchange Commission and the Office of the Comptroller of the Currency have stepped up their efforts to regulate stablecoins in the last year.
Throughout, Diem hemorrhaged executives and engineers, culminating in the departure of founder David Marcus at the end of 2021. In a possible sign of things to come, Diem member Andreessen Horowitz hired two of the lead Novi wallet engineers away from the project in October.
According to Bloomberg, which cited anonymous sources, “discussions are early…and there’s no guarantee Diem will find a buyer.”
After all, this is one stablecoin that’s been anything but stable.