A controversial cryptocurrency project defended by Facebook founder Mark Zuckerberg has collapsed to Congress under regulatory pressure. More than two years after it was first announced, it appears that the company-sponsored cryptocurrency is about to expire.
The Arab Tech Portal reports that the Deem Association, a cryptocurrency initiative formerly known as Libra, backed by Facebook owner Meta, is considering selling its assets as a way to return capital to member investors.
Deem is in discussions with investment bankers to sell her intellectual property. You want to find a new workplace for the engineers who are developing this technology. You also want to redeem any remaining value in the Diem Coin item.
In 2019, when Facebook first unveiled its idea of a stable digital currency aimed at revolutionizing financial services around the world, it partnered with dozens of other companies to do so.
But unions are not enough to protect the project from global regulatory scrutiny. After Zuckerberg was called to testify, some partners dropped the project and renamed it Diem.
Diem’s ambitions waned, and founder David Marcus was left dead last year. The association has entered into an agreement with Silvergate Capital for the issuance of Diem. But the Fed’s resistance dealt a fatal blow to those efforts.
The Deem Association said in May that an affiliate of Silvergate Capital would be the issuer of the dime-dollar stablecoin, a cryptocurrency pegged to the dollar that is typically used to buy and sell other cryptocurrencies.
After a long argument between Diem’s advocates and regulators, Fed officials told Silvergate Capital that the agency was uneasy about the plan. It could not assure the company that it would allow such activity.
Without the green light from the Federal Reserve, Silvergate Capital cannot issue new assets without the Fed taking drastic action.
It’s unclear how potential buyers will appreciate Diem’s intellectual property or the engineers who helped develop it.
Meta owns about a third of the enterprise, and the rest is owned by the association’s members. Association members, including venture capital firms and technology firms, agreed to invest and pay to join when the association was formed. It is not clear which companies other than Meta have invested in the program.
Deem explained that his partners include venture capital firms. In addition to Singapore’s state-owned investor Temasek Holdings Pte Ltd.
The President’s Financial Markets Task Force said in a November report that issuers of stablecoins should be regulated if tokens are used as a way to buy and sell things.