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Meta’s (formerly Facebook) “Diem” stablecoin cryptocurrency project seems to be crumbling after years of social and regulatory pressures, Bloomberg reported. The project, formerly known as Libra, is reportedly seeking to sell its assets in order to return capital to investors and association members.
Facebook’s Libra cryptocurrency was slated to launch in 2019, but backlash from regulators forced the association to hold off until it received appropriate approvals. In October 2019, several companies, including PayPal, eBay, Mastercard and Stripe, left the Libra Association, increasing doubt that the project would ever work.
In a statement from 2019, PayPal noted why it was leaving the project:
“PayPal has made the decision to forgo further participation in the Libra association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.”
Since then, PayPal has made its own entry into the cryptocurrency space, letting its users buy, sell and hold cryptocurrency on its platform.
Concern over the Diem project stemmed from both Facebook’s history with data and also the fact that Libra would be a permissioned and private system that could potentially undermine existing monetary systems should it become popular.
After so much backlash from regulators, the Libra Association changed its name to the Diem Association in 2020, just as Facebook would later change its name to Meta after becoming synonymous with unethical data practices.
To add more uncertainty to the project, Diem’s head David Marcus, announced his departure from Meta and Diem through a series of Tweets in November of last year.
Personal news: after a fulfilling seven years at Meta, I’ve made the difficult decision to step down and leave the company at the end of this year. (1/7)
— David Marcus – dmarcus.eth (@davidmarcus) November 30, 2021
The new version of Diem would also depart from its prior concept of a stablecoin backed by the International Monetary Fund’s SDR, a basket of top currencies including USD, EUR, CNY, JPY and GBP, and instead use a USD-only backed stablecoin issued by a major bank. But Diem couldn’t seem to shake the regulatory and social pressures.
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