Meta cryptocurrency venture faces collapse - Mobile World Live

Meta cryptocurrency venture faces collapse

27 JAN 2022

Multiple reports stated Diem Association, a controversial digital currency venture backed by Facebook parent Meta Platforms, had begun winding down, apparently finally bowing to a wave of regulatory resistence which plagued it since its launch in 2019.

The Wall Street Journal reported Diem Association is in talks about selling its technology to its California-based partner Silvergate Capital for about $200 million.

Originally branded Libra, the cryptocurrency project quickly became mired in controversy and came under intense scrutiny from regulators.

This, in turn led to early high-profile backers including Vodafone Group, Visa and Mastercard pulling their support for the project.

Reporting on the planned sale, Financial Times noted Meta Platforms has been seeking revenue sources to power its future growth, suggesting a sale could give Diem Association the opportunity to pay out some funds to the initiative’s founding members, which the newspaper reported initially committed $10 million to participate.

Meta Platforms made various efforts to revamp the unit in a bid to appease global regulators, including a rebrand and refocus in 2020; a deal in 2021 to make Silvergate Bank the exclusive issuer of Diem currency and tie its value to the US dollar; and moving its primary operations from Switzerland to the US.

However, Politico reports US authorities were not prepared to approve the project: sources told the news service sales talks are in progress, but indicated a slim chance of the project being salvaged.

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Anne Morris

Anne Morris is a freelance journalist and contributes news and analysis to Mobile World Live.

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