Meta reportedly looks to sell off its Diem crypto project

    29 Jan 2022

    According to anonymous sources, Meta (ex-Facebook) appears to be looking to pull the pin on its Diem/Novi crypto project, with company representatives searching for a buyer for its intellectual property. After three years of development and a raft of changes to its name, scope, leadership, and purpose, it seems like Meta’s trouble stablecoin project may soon come to an end.

    According to Bloomberg, the Diem Association, formerly known as Libra, is in talks to sell off its assets and return capital to investors.

    The project’s members include a few dozen of the world’s biggest tech companies and investors, including Uber, a16z, Temasek, Spotify, Coinbase, and Ribbit Capital — although it’s unclear which of Diem’s members invested in the project.

    According to reports, the group has held discussions with investment bankers over how best to hawk its intellectual property and find new employment for its engineers. However, the discussions are ongoing, and there is no guarantee that Diem will find a buyer.

    Some of the bigger founding members appear to have gotten cold feet. Seven of the original 28 founding members — that’s a quarter of them — dropped out before the association’s inaugural meeting in Geneva. Those exiting included PayPal, eBay, Stripe, and financial services giants Visa and Mastercard. The departures are big losses because those members brought expertise in payments and transfers technology. The other dropouts are Mercado Pago, the online payments platform of Argentina’s Mercado Libre marketplace, and Booking Holdings, an online travel company that runs sites including Priceline, Kayak, and OpenTable.

    It is a muted end to a project that burst onto the scene in 2019 with a bold plan to create a new form of stablecoin destined for use within Meta’s family of apps and beyond.

    Diem (former Libra) faced stern early opposition from regulators and was forced to rein in its ambitions. Instead of a stablecoin backed by a basket of global fiat currencies, the vision morphed into individual coins backed by single national currencies.

    But the setbacks kept coming. In August last year, The Block reported that Meta’s crypto subsidiary Novi planned to work with a stablecoin issuer other than Diem. A planned stablecoin partnership with crypto-friendly Silvergate Bank also drew regulatory opposition.

    And finally, Meta’s crypto lead and a co-founder of Diem David Marcus resigned from the social media company in November.

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