Home LATEST NEWS HIGH TECH Meta abandons its Diem digital currency project

Meta abandons its Diem digital currency project

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The social media giant had entered the arena of virtual currencies by creating the libra in 2019, which was to offer a new method of payment outside traditional banking circuits.

Aware of the concerns of regulatory bodies with regard to a currency managed by a private company, the American group then decided to entrust its management to an independent entity, based in Geneva, Switzerland. The organization then renamed itself Diem in late 2020.

It had become clear during our discussions with the American authorities that the project could not go any further. »

A quote from Stuart Levey, CEO of Diem Association

Diem will therefore sell its intellectual property rights and other company assets for US$182 million (C$231.1 million) to digital currency specialist Silvergate Capital Corporation.

The promise of a new payment method

Originally, Facebook envisioned a new payment method that would make buying goods or sending money as easy and quick as an instant message.

From the start, Diem sought to harness the benefits of blockchain technology (blockchain) to design a better and more inclusive payment system. »

A quote from Stuart Levey

The association has managed to build and test a technology-based payment system that also runs bitcoin, which includes safeguards against its use by criminals, according to the association’s chief executive.

However, the project quickly aroused an outcry from central banks, regulatory bodies and elected officials alike. These groups and individuals were concerned, among other things, about the risks to the stability of the financial system, the fight against money laundering and the protection of personal data.

The idea of ​​Facebook making a cryptocurrency had everyone panicking. »

A quote from Rob Enderle, Enderle Group Analyst

For regulators, this was going too far. They had made it clear that they did not trust Facebookhe added in an interview with Agence France-Presse (AFP).

We have actively sought feedback from governments and regulators around the world, and the project has evolved and improved significantly as a result.defended the head of Diem.

The association and its subsidiaries will begin to dismantle in the next weekshe specified.

For Carolina Milanesi, creative strategies analyst, Meta has decided to cut his losses and focus on what matters most to himthe metaverse.

According to Rob Enderle, Facebook’s reputation has reached a stage where she will find it very difficult to undertake something major.

From Diem to stablecoin

Silvergate, the bank buying Diem’s ​​assets, said in a separate statement that it will pay US$50 million (C$63.5 million) in cash and pay approximately 1.2 million new shares to Diem. , for a total amount equivalent to 182 million US dollars (231.1 million Canadian dollars).

With Diem’s ​​assets, in fact, the California-based bank wants in particular to improve the infrastructure it has already put in place for its own stablecoin project, a stable digital currency whose price is supposed to be at constant parity with the dollar.

Silvergate, which plans to launch it later this year,open-source)”,”text”:”is committed to continuing to foster the developer community by working in open code (open source)”}}”>is committed to continuing to foster the developer community by working in open code (open-source)said its managing director, Alan Lane, confident.

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