The Diem Association (formerly known as Libra Association), the Meta-led project that once aimed to create a stablecoin accessible to everyone in the world, is reportedly attempting to sell its assets as a way to return capital to its investors.
The association is in discussions with investment bankers about selling Diem’s intellectual property, Bloomberg said, citing people familiar with the matter. The report also noted that Diem aims to help the engineers who developed the project find new places to work.
It remains largely unclear how Diem would be valued, or even if it would be able to find a buyer.
Mark Zuckerberg’s Meta allegedly owns about one-third of the venture and the remainder is owned by the members of the association, which include uncited venture capital firms and technology companies.
Diem’s website currently features more than a dozen partners, which include venture capital firms such as Andreessen Horowitz, Ribbit Capital, Union Square Ventures, and Thrive Capital. Other notable partners include major crypto exchange Coinbase, ride-hailing company Uber, and commerce platform Shopify.
Meta (back then still Facebook), first unveiled its heavily-backed stablecoin project in 2019. However, things started to go south as regulators from around the globe showed skepticism towards the project.
Lawmakers soon demanded the project to cease all its operations until they better understand it and investigate the possible risks it can pose to the global financial system. Even Zuckerberg’s testimony before Congress couldn’t convince lawmakers about the project’s grand visions, and some partners started abandoning the project.
In December 2020, the Libra project rebranded to Diem and considerably scaled down from its ambitious goals, yet it couldn’t stop the regulatory backlash. Notably, the project’s founder, David Marcus, left it last year.
In May 2021, Diem partnered with Silvergate Bank to launch a stablecoin pegged to the US dollar. However, the US Federal Reserve remained skeptical of the plan and didn’t guarantee that it would give its approval.
In October 2021, Meta launched a pilot program for its digital wallet Novi in the US and Guatemala. The pilot did not include Meta’s controversial stablecoin Diem, but it still received massive backlash.
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” several US Senators wrote to Zuckerberg.
“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient,” they added.
Meanwhile, as reported, some find that the long-awaited Diem may play a key role as Meta continues its drive toward a metaverse-themed future.
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