Diem Selling Assets to Silvergate for $200M, Ending Facebook’s Stablecoin Project: Report

Facebook’s stablecoin ambitions may finally be dead. Following Tuesday’s report that the Diem Association was looking to sell off its assets and intellectual property, The Wall Street Journal reports today that Silvergate Capital will indeed buy its assets for about $200 million.

According to the Journal report, which cites an unnamed person familiar with the situation, the Diem Association will “wind down” its plans to launch a stablecoin following the sale to the crypto-focused, California-based bank. Silvergate was previously announced as an issuer of the stablecoin, but the plan never came to fruition.

If true, the report signals an unceremonious end to Facebook’s (or Meta’s) ambitions in the crypto space. Facebook initially launched the originally-named Libra Association in 2019 alongside a smattering of tech and financial allies, with plans to launch a crypto stablecoin backed by a basket of global currencies.

Pushback came swiftly, however, as regulators questioned Facebook’s ambitions and approach. Partners such as PayPal, Visa, eBay, Stripe, and Mastercard all bailed out in late 2019, but Facebook continued ahead. It rebranded the effort as Diem, and shifted the approach to that of a dollar-backed stablecoin.

However, the status of the project became unclear in recent months as updates were fewer and fewer and top talent departed the Diem Association, including founder David Marcus at the end of 2021.

While the reported sale has yet to be officially announced, Bloomberg reported Tuesday that the Diem Association was looking to sell and bow out “as a way to return capital to its investor members.”