Mark Zuckerberg-backed stablecoin project Diem seemed to be headed for a dead-end as reports emerged that the Diem Association is supposedly ‘weighing a sale of its assets as a way to return capital to its investor members.’
However it remains unknown with regards to the kind of asset the Diem Association owns, but Bloomberg reported that the group is in talks with investment bankers about selling its intellectual property and finding “a new home for the engineers that developed the technology.”
Having said that, a sale would likely be the final blow to the crypto project that Mark Zuckerberg had once trumpeted. As a matter of fact, on many occasions plans to get the stablecoin off the ground continued to meet tough opposition from reasons such as regulatory pushback and lawmaker concerns.
Things didn’t improve even after rebranding Diem as Libra as several high-profile partners backed out of the project in 2019.
Mark Zuckerberg’s Diem project was scaled down owing to regulatory pressure?
As per media reports, negotiations were not successful between Diem and Fed when the latter did not approve the proposal. Last summer, Facebook started a pilot testing of Novi, the cryptocurrency wallet previously known as Calibra. But the fact that Novi was forced to launch without support for Diem and instead it used a different stablecoin called the Pax Dollar was enough to indicate that Diem’s future remained uncertain.
Things looked hopeful when Facebook exec David Marcus, who was hired by CEO Mark Zuckerberg in 2014 from PayPal to oversee its Messenger app as well as the social network’s crypto plans, said at the time that Facebook remained committed to Diem.
“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live,” he wrote. But a month later Marcus announced that he was leaving Facebook. Still, there is no official confirmation from the Diem Association regarding the future of the project.
A representative for the Diem Association Michael Crittenden cited the original Bloomberg’s report on the matter and did say it contained unspecified “factual errors,” but declined to elaborate or comment further into the specifics.