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Diem, Facebook’s cryptocurrency, appears to have its days numbered

BusinessDiem, Facebook's cryptocurrency, appears to have its days numbered

In June 2019, Facebook proposed a revolution: Zuckerberg announced his cryptocurrency Libra and painted a future in which we would pay our Facebook, Messenger and WhatsApp contacts with this digital currency.

The project, however, never took off. The idea didn’t go down well with regulators, and Facebook (now Meta) had to scale back its ambitions and rename the project Diem. Even that was not enough, and now sources close to the company indicate that Meta is trying to sell that division to get rid of the Diem project, which has a complicated future.

The cryptocurrency was a ‘stablecoin’, a virtual currency that would theoretically maintain a stable value, which would always be closely linked to that of a state currency such as the US dollar. Diem was expected to appear in January 2021, but that never happened.

The initial partners of the Libra project jumped ship shortly after the initiative was announced. One of the reasons was the emergence of the privacy scandals surrounding the company at the time, which caused Facebook to decide to change its approach and rename the project to Diem.

Those behind the project indicated in May last year that a company affiliated with the project, Silvergate Bank, would be the one to issue the Diem USD stablecoin, but regulators were not comfortable with the idea and made it clear that they did not know if they would give the go-ahead for such activity. Silvergate ended up not making a move, and Diem remained in limbo.

Now sources close to the project indicate that Meta (formerly Facebook) is trying to sell the resources and assets of the Diem project. This would be an unmistakable sign that Zuckerberg’s company would abandon a proposal that was shaken by the departure of David Marcus, head of the idea, who left Meta last year along with a large part of the founding team of the Libra project.

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