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The advancement of the Diem project has hit many roadblocks in recent times including the exit of the project by some of the early investors, a move that became necessary when Zuckerberg testified before Congress.
The Diem stablecoin project, formerly known as Libra may be winding up its existence as there are reports the project, backed by Meta Platforms Inc (NASDAQ: FB) is looking at liquidating the project’s intellectual property and assets. As reported by Bloomberg, citing sources familiar with the matter, the project is in talks with investment bankers on how best to value the company and return some funds back to investors who backed the project.
Meta Platforms unveiled the Diem project back in June 2019, and its ambitions were swiftly crushed by mounting regulations around the world. With the plans to turn the Diem coin into the currency of the internet, watchdogs and lawmakers in the United States expressed concerns about the chances of the project impairing monetary sovereignty judging from Facebook’s billions of Daily Active Users.
Despite the fact that many industry giants including Singapore-owned Temasek, Coinbase Global Inc (NASDAQ: COIN), and Andreessen Horowitz (a16z) are stakeholders in the project, their influence is largely not enough in convincing regulators of the prospects of the Diem project.
While Meta or any of the investors did not make any comment regarding the liquidation claims, the plans are ongoing with the company exploring avenues to find a new home for the engineers that worked on the project.
Meta and the Diem Woes
The advancement of the Diem project has hit many roadblocks in recent times including the exit of the project by some of the early investors, a move that became necessary the moment Mark Zuckerberg testified before Congress.
The exit of some of the members of the Diem association has largely weakened the project, and the potential achievement of the project was further impaired when Silvergate Bank, a subsidiary of Silvergate Capital Corp that was supposed to be the issuer of the coin was unable to get clarity from regulators about its plans for the Diem Coin.
According to Bloomberg sources, the likelihood of a crackdown from the United States Federal Reserve came off as the final straw that broke the Camel’s back, further weakening the resolve of the project’s backers. This was notably compounded with the exit of David Marcus, the then head of the Diem project.
According to the sources, it is unclear if the Diem project will find a buyer, or how exactly the Intellectual Property will be valued. From the ownership stake, Meta Platforms which owns about a third of the entire project will stand to benefit more, and there were no indications whether Novi Wallet will be involved in the entire selloff plans. Meta Platforms may be considering the selloff in a bid to further focus its attention on its metaverse plans, for which it changed its name from Facebook Inc last year.