Sources: Meta-backed Diem Association is talking to investment bankers about selling its IP to return capital to investors and giving its engineers a new home
The controversial cryptocurrency project that Mark Zuckerberg once defended in front of Congress is unraveling after regulatory pressure.
Bloomberg
Context & Ripple Effects
Diem had already retreated from its Swiss licensing plan in favor of operating through a California state-chartered bank, while related coverage documented how privacy concerns and regulatory scrutiny had constrained both Diem and its earlier Libra incarnation. The reported IP-sale talks therefore mark a shift from adapting the project’s operating structure to unwinding it.
The next day’s report of a technology sale to Silvergate gives the discussions a concrete prospective buyer, while ex-Diem staff later formed the talent base for Aptos.
First-order effects
Diem’s investors face a potential return of capital through an IP sale rather than a continuing payments venture.
Diem engineers are being positioned for placement with new employers, making retention and the transfer of technical expertise central to the wind-down.
Second-order effects
Silvergate, which serves crypto companies, would gain Diem technology through the reported transaction, redirecting assets built for a Meta-backed network into a specialist banking business.
The wind-down releases a concentrated group of blockchain engineers into the market; Aptos’s later funding shows one route by which Diem-era expertise moved into an independent Layer 1 project.
If assets and engineers continue to disperse after failed crypto-network launches, value creation shifts from consumer-facing currency projects toward banks and independent blockchain builders able to operate within narrower regulatory boundaries.
The trend: Crypto payment initiatives are moving from ambitious corporate network launches toward regulated intermediaries and spinout teams as policy control limits platform-led monetary systems.
BREAKING from Bloomberg: Diem, the cryptocurrency initiative once known as Libra backed by Meta, is weighing a sale of its assets as a way to return capital to its investor members, per sources https://www.bloomberg.com/...
I've never felt this connected to a community of builders like the crypto/web3 one. I'm not talking about folks who are in it for a quick speculative win. I'm talking about people who want to rebuild the internet's infrastructure to move value and power in the hands of people.
There were many problems (regulatory pressure, partners getting cold feet, etc) but the U.S. Federal Reserve dealt the final blow by resisting the stablecoin plans, report @LianaBaker @jesseahamilton @olgakharif
Alternate headline: Regulators kill Meta's crypto project in retaliation for various political grievances with Meta's social media apps https://twitter.com/...
Facebook's digital currency dreams have quickly become a nightmare. The Diem stablecoin project is considering a sale of its assets after facing resistance from the Federal Reserve, per Bloomberg reporting: https://www.bloomberg.com/...
Too much regulatory pressure and Facebook's reach is so large it would have screwed with the Global Central Banks plans for CBDCs. If I was the guys at @circlepay I would scoop this up and further dominate the stablecoin market via USDC - thoughts @jerallaire? https://twitter.com…
More than two years and many rebrands later, the Facebook-sponsored cryptocurrency Diem is looking kaput and exploring a sale, per Bloomberg. I've also heard that the Fed blocked its launch last year, putting what appears to be the final nail in the coffin https://www.theverge.co…
Poop, crap, manure, shit, @facebook @meta Libra Foundation or Diem. Now matter what you call it and now matter how expensive and how colorful a lipstick you put on a pig, reality doesn't change. https://www.bloomberg.com/...
I had high hopes for this This was the digital currency that could change the world literally. A Metacoin will rival the US Dollar and it has no inflation No wonder the pushback. Mark Zuckerberg's Stablecoin Ambitions Unravel With Diem Sale Talks https://www.bloomberg.com/...
Stable coins are perhaps the crypto idea most likely to quickly and directly benefit consumers globally, so it's ironic governments have stymied big regulation-friendly companies from making them while crypto scams of all flavors run wild. 🙃 https://www.bloomberg.com/...
If you ask the government for permission to launch a viable alternative currency outside of their control, they aren't going to say yes. Hence why Satoshi had to do it Cypherpunk style with unstoppable open-source code https://twitter.com/...
Someday there may be a #Crypto-something that isn't a get-rich-quick scheme headed for a fiery crash, but I certainly haven't seen one yet. and that's even before getting to the climate-destroying electricity use that is inherent to all #Crypto. https://www.bloomberg.com/...?
I'm shocked, shocked, I tell you, that the dumpster fire that was Libra/Novi/Diem is dying not with a bang, but with a whimper. From its faux Latin name to its wrong-headeness from the start, it has more in common with Magnises than #Bitcoin Listen to the signal, ignore noise.
Even Facebook can't figure out how to make money with a “stablecoin”. Circle lost over $330 million dollars in 2021. Probably why Tether can't show their cards. https://twitter.com/...
interesting situation, and possibly relevant for Facebook's/Meta's metaverse strategy if they don't get to own the payment rail, do they focus on trying to own the seemingly benign NFT asset rail because regulators understand it less? or will they look at public options? tbd http…
Thanks Zuck and @davidmarcus for leaving the crypto ecosystem whit the shittiest gift ever - FATF Virtual Asset Guidelines. RIP diem. https://www.bloomberg.com/...