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| Facebook's Cryptocurrency Is About to Crash |
A controversial cryptocurrency project sponsored by Facebook founder Mark Zuckerberg has collapsed before Congress under regulatory pressure. More than two years after its initial announcement, the company-sponsored cryptocurrency appears to be on the verge of expiration.
Diem, a cryptocurrency initiative backed by the owner of Facebook Meta, formerly known as Libra, is considering selling its assets to return capital to its member investors.
Deem is in talks with investment bankers to sell his intellectual property. They want to find a new job for the engineers who are developing this technology. You also want to get the residual value in the Diem Coin item.
When Facebook first pitched its idea of a stable digital currency that aims to revolutionize financial services around the world in 2019, it joined forces with dozens of other companies.
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 him Diem.
Diem's ambitions waned and founder David Marcus Meta left last year. The association has entered into an agreement with Silvergate Capital for the issuance of Diem. But opposition from the Federal Reserve dealt a fatal blow to those efforts.
A subsidiary of Silvergate Capital will issue the Diem USD stablecoin, a cryptocurrency pegged to the dollar that is typically used to buy and sell other cryptocurrencies, the Diem Association announced in May.
After a long feud between Diem supporters and regulators, Fed officials told Silvergate Capital that the agency was concerned about the plan. It cannot assure the Company that it will allow such activities.
Without the Fed's green light, Silvergate Capital cannot issue new assets without aggressive Fed action.
The cryptocurrency that the founder of Facebook defended is collapsing
It's unclear how potential buyers will appreciate Diem's intellectual property or the engineers who helped create it.
Meta owns about a third of the project, while members of the association keep the rest. The members of the association, including venture capitalists and technology companies, agreed to invest in the establishment of the association and pay to join. It's not clear which companies other than Meta have actually invested in the program.
Deem explained that his partners include venture capital firms. In addition to the public investor company 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.
The regulators group said it was concerned about what would happen if the tech company’s vast user network suddenly adopted a new currency, and that combining stablecoin sources with large companies could lead to an excessive concentration of economic power.