Meta CEO Mark Zuckerberg is seeing the demise of his cryptocurrency project due to regulatory pressures, Bloomberg reported Tuesday (Jan. 25).
The Diem Association, which used to be known as Libra and which is backed by Meta, is looking at selling its assets as a way to potentially return capital to investor members.
Meta’s Facebook debuted the idea for a stable digital currency in 2019, purporting that it could deliver big changes for global finance. The company collaborated with dozens of others at the time. However, the partnerships weren’t enough to protect it all from a huge amount of scrutiny — Zuckerberg was called to testify before Congress, and then several partners dropped out of the project.
The project changed its name to Diem from Libra after Zuckerberg’s testimony, the report says.
Now, according to Bloomberg, Diem is speaking with investment bankers on strategies to sell off its intellectual property. It will also seek to find new homes for the engineers who developed the tech, cashing out any other value remaining in the venture.
As the discussions aren’t public, Bloomberg only cites anonymous sources.
In May, Diem said an affiliate of the firm, Silvergate Bank, would be the one to issue the Diem USD stablecoin. However, Diem advocates and regulators ended up engaging in a back-and-forth, and Federal Reserve officials eventually said they were not on board with the plan and couldn’t promise that they’d allow it.
Because there was no green light, Silvergate didn’t have the confidence to issue the asset — so no coin was produced.
PYMNTS wrote that Facebook had planned to link the launch of its Novi digital wallet to Diem’s rollout, as of last August.
Read more: Facebook Ties Novi Launch To Diem, May Include NFT Features
Novi is a crypto wallet from Facebook that purported to let individuals and companies transfer funds domestically and internationally and hold non-fungible tokens (NFTs).
Facebook’s hope was that Novi, which was ready to launch, could be paired with the Diem coin, which was still mired in issues back then.
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