According to a Monday announcement by the CEO of Diem, the Diem Association has sold the intellectual property of the Diem Payment Network to Silvergate Capital Corporation.
The Meta-backed cryptocurrency project partnered with Silvergate in May 2021 to launch a US dollar-pegged digital currency. The Diem project, formerly known as Libra, will be back to work “in the coming weeks” after Mark Zuckerberg officially abandoned the stablecoin. The aim of the project was to create a digital coin with greater convenience and speed than other cryptocurrencies without their volatility.
“From the beginning, the DIAM project has been focused on leveraging the benefits of blockchain technology to design a better and more inclusive payment system. Driven by the DIAM Association members and our excellent team, the desire to deliver substantial benefits to consumers and businesses Having pursued this approach with determination and perseverance, along with payment solutions for those who are currently completely deprived or excluded from the traditional financial system.”
Diem CEO Stuart Levey said in an official announcement.
why stop?
Silvergate will officially acquire Diem Association’s intellectual property and other assets for $182 million, after the US Federal Reserve (FED) barred Meta from proceeding with the crypto project. “As part of integrating acquired assets into Silvergate’s existing technology, Silvergate expects to spend approximately $30 million in additional costs in 2022,” the company officially announced on January 31.
Many top companies including Mastercard, PayPal, Visa, etc. have backed Facebook, formerly Meta, since launching the Libra project in 2019. The company faced resistance from the Fed for containing risks including “volatile run, payment system disruption.” and the concentration of economic power,” Bloomberg reported.
Meta started by allowing users to send and receive payments via Novi Wallet on WhatsApp, prompting financial watchdogs to start scrutinizing the wallet. Furthermore, US and EU regulators have always viewed stablecoins as a threat to national fiat currencies.
Furthermore, CEO Levey believes that Silvergate could revive the stablecoin project. “We have been a believer in the ability of a stablecoin running on a blockchain designed like Diem to deliver the benefits that inspired the Diem Association since its inception. With today’s sale Silvergate is looking to take this vision forward. In the coming weeks, the Diem Association and its subsidiaries are expected to begin the process of closure, but we look forward to seeing Diem’s design choices and ideals,” he said.
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