Diem said it “became clear from our dialogue
with federal regulators that the project could
not move ahead. As a result, the best path
forward was to sell the Diem Group’s assets” and
the project will wind down in the coming weeks.
It’s been clear for a while that Diem, which was
first named Libra, was fighting an uphill battle
with regulators. Meta has gradually distanced
itself from the project.
Last May, the Diem Association, which at
the time included Facebook and 25 other
companies entered a partnership with Silvergate
Capital Corp. to issue a “stablecoin” backed by
the U.S. dollar. A stablecoin is a digital currency
backed by real-world assets such as national
currencies or other commodities.
Facebook announced the Libra project in 2019,
at the time envisioning it as a stablecoin based
on a basket of national currencies that could
serve as a global currency for the unbanked
around the world.
But the effort was scaled back considerably
amid regulatory and commercial backlash. It
underwent a name change in December 2020.