Meta to wind down stablecoin project Diem with $200 million asset sale: report

Californian bank Silvergate Capital has swooped to buy Meta-backed crypto project Diem’s technology assets for $200 million, according to the Wall Street Journal. 

The bank had agreed last year to partner with Diem to launch a US stablecoin pegged to the dollar. The offering was meant to be user-friendly, and to revive the project first coined Libra in 2019, when Meta was still called Facebook. The stablecoin never launched, however.

Citing people familiar, Bloomberg reported earlier in the week that Meta was weighing a sale of Diem’s assets as a way to return capital to its investor members. Investment bankers had been brought in to evaluate how best to sell its IP and try to find employment for its engineers.

Diem had faced stern opposition from regulators from the outset 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 tokens backed by single national currencies.

But the setbacks kept coming. In August last year, The Block reported that Meta’s crypto subsidiary Novi was planning to work with a stablecoin issuer other than Diem. 

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

The Block contacted Meta for comment but had not heard back by the time of publication.