Diem, the cryptocurrency project of Meta is now officially closing it’s doors for good. Diem announced its sell-off to Silvergate, a cryptocurrency bank.
The deal, which is worth $200 million, will let Silvergate have ownership of Diem’s all network assets. What Silvergate is planning to do with this isn’t known yet, but Diem’s demise is reasoned with the harsh regulatory challenges it faced since its inception.
Demise of Diem
Diem started off as Libra in mid-2019, with a good aim though. Introducing a global payment system that’s based on blockchain with easy-to-use digital wallets. This can cover the people in remote areas where banking isn’t available, so help them use online payment with convenience.
But, this project was blocked by regulators since its inception in various means. One among them is the privacy issue since it’s backed by Meta (formerly Facebook). Also, letting a global platform of that scale form a payment system will make it grow even bigger, making it harder for regulators to trust it.
Thus, they’re hammering the project from the very beginning. Announcing the official shutdown of Diem, Stuart Levey, the project CEO said in a press release as they’re winding up only after it’s “clear from our dialogue with federal regulators that the project could not move ahead.”
All the partners of Diem, like eBay, PayPal, Mastercard, Visa, and Stripe have exited earlier after observing the political thrust against the project.
Though it’s now shutting down, Silvergate, the cryptocurrency bank that was earlier a partner with Diem, may make plans to revive it. Buying the Diem’s network assets for $200 million was seen as a good move by Silvergate investors, as the company’s stock rose to over 12% on Monday when the deal was announced.
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