Mark Zuckerberg’s ambitious plan to build his own cryptocurrency is falling apart amid growing pressure from regulators.
The Diem Association, which oversees the development of the Diem digital currency, is considering selling its assets to return capital to its investors, according to a Bloomberg report released Wednesday morning.
A spokesperson for the Diem association did not want to comment. Facebook’s parent company, Meta, did not respond to a request for comment.
Diem is apparently now in talks with investment bankers about next steps, including how to sell his intellectual property, in an attempt to capture the value that remains. Sources speaking with Bloomberg say the company is also trying to find a new destination for the engineers who developed this technology.
Talks are apparently still in the early stages, and there is no guarantee that Diem will get a buyer. Even if they do, the report noted that it is unclear how they will place a value on the project’s intellectual property, or the engineers who developed it.
One of the people speaking to Bloomberg on condition of anonymity says that Meta owns about a third of the business, and the rest is owned by association members, such as Andreessen Horowitz, Union Square Ventures and Ribbit Capital.
Zuckerberg’s beleagured crypto project has been halted by drama since it was first announced in June 2019.
At the time, the cryptocurrency was called Libra, and it was initially considered a stable coin, which is a specific subset of cryptocurrencies that have a value linked to an actual asset, such as a fiat currency. such as the US dollar or a commodity such as gold. In the case of Zuckerberg’s stablecoin, the initial plan was to introduce a universal currency linked to a basket of major currencies and government debt.
The project was immediately greeted with hostility by central bankers and politicians, who feared it could facilitate ominous activities such as money laundering and invasion of privacy, as well as a formidable competitor to sovereign currencies such as the US dollar. In the wake of regulatory setbacks, the controversial project turned to the concept of introducing multiple stable currencies, each of which would be pegged to a fiat currency, plus one multi-currency currency.
Eventually, the vision for the cryptocurrency was scaled down to a US dollar-backed stablecoin known as Diem USD.
The project itself also followed a somewhat complicated chain of ownership and suffered an exodus of corporate partners and top-level executives.
It also once had the support of several partners, but when the Meta chief went to Capitol Hill to defend the project, key supporters such as Visa, Mastercard and PayPal abandoned the project. In November last year, David Marcus, the head of Meta’s cryptocurrency efforts, announced that he was also leaving.