FACEBOOK'S DIEM STABLECOIN PROJECT "ON THE VERGE OF COLLAPSE"

Facebook's once "stormy" stablecoin project is said to be "selling off" assets to refund investors.

 

On the morning of January 26, Bloomberg reported that the Diem Association, the organization behind the stablecoin Diem (formerly known as Libra) announced by Facebook and many other large organizations since 2019, is looking to liquidate assets to return investors.

 

Citing an insider, Bloomberg confirmed that Diem is in discussions with a number of banks to find a way to sell assets and intellectual property rights, as well as find a new place to recruit for the engineering team that has been collected by the project. decades over the years. However, given Diem's ​​current legal status, it's unclear how the project will attract interest from buyers.

According to Bloomberg , up to now, Diem is still helpless in finding a banking partner to issue stablecoins for them. There was a time when it seemed that Diem had struck a deal with the banking group Silvergate Capital Corp. of the United States, but was interrupted by the US Federal Reserve (Fed) and blocked the negotiation process.

 

Before that, in mid-2019, the social network Facebook launched Libra - a stablecoin project pegged to a basket of currencies, including the US dollar - with the participation of many giants MasterCard, Uber, eBay, Spotify, PayPal, Visa, etc. Facebook aspires to make Libra its own currency, used in payments for more than 2 billion global Facebook/Instagram/WhatsApp users.

 

However, almost immediately, the plan to release Libra was opposed by US and global officials , causing the project to stall because it did not receive recognition from any financial regulators. which main. A few months later, the giants that initially announced their support for the project one by one abandoned Libra , pursuing their own cryptocurrency initiatives.

 

After nearly 2 years of "immobility", in December 2020, Libra announced to "change its name" to Diem with the desire to "change luck". Despite this, for the whole of 2021, the cryptocurrency market exploded , Diem still did not have any new developments, despite Facebook's announcement to change its name to Meta to reflect its ambitions to build the metaverse, and the Novi digital wallet. developed in parallel with Diem , also released the first test version .

 

In December 2021, the "father" of Libra/Diem, David Marcus, announced his departure from Facebook , dealing another blow to the project.