Diem would probably never see the light of day. In the corner of financial regulators, the Association Diem, to which Facebook has entrusted the project, would not be able to launch a cryptocurrency after two years of development.
In mid-2019, Facebook (under the name Meta) announced the launch of its own cryptocurrency. The project, originally called Libra, grew rapidly encountered numerous regulatory obstacles. To reassure financial regulators who fear Facebook’s grip on the power to create money, the social network has taken a distance from the project.
The development of the scale, now Diem, was entrusted to an independent body, Diem Association. The project developed for some time despite threats from the fiscal police. The association has also developed digital wallet stablecoin, a digital currency with a stable price for storing and exchanging. The first test of the wallet has begun in the United States and Guatemala but without Diem. The application only allows free exchange of the Pax Dollar, a stable coin regulated in the United States.
Towards the end of Diem?
Despite these encouraging signs David Marcus, the project manager since its inception, decided to jump on the ship last December, raising Diem’s fear of the worst. According to our Bloomberg colleagues, the project is indeed collapsing.
Referring to those familiar with the matter, the Association Diem is considering return capital to its investors by continuing to sell all its assets. As a reminder, the stablecoin project has well-known investors such as Uber, Shopify and the Coinbase cryptocurrency exchange platform.
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This resale would mean abandoning the development of Diem. “Diem talks to investment bankers about how best to sell their intangible assets and find a new home for engineers who have developed the technology.Bloomberg says in a report.
Regulators are increasingly interested in the subject stable coins, which they see as an unmanageable alternative to the traditional fiat currency. A few months ago, the U.S. Federal Reserve banned Silvergate in the U.S. from issuing a badge developed by Facebook teams.