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Time to Let Go
It has been reported that Facebook’s short stint into the crypto world is coming to an end soon. The Wall Street Journal had reported on Wednesday that Diem Association’s blockchain and crypto facility, which is led by Facebook, is up for sale to a bank in California for a price of $200 million.
The social media giant which changed its name to Meta Platform Inc., Facebook, was not immediately available to respond to media inquiries when the news filtered in.
It was reported that the purchasing bank, Silvergate Capital Corporation, had earlier struck a business agreement with Diem to be the issuer of the association’s stablecoin, however, Bloomberg reported that the deal was obstructed by the Federal Reserve.
Silvergate Capital Corporation is an American holding firm for its crypto-centered mother bank which makes financial facilities and services available to digital asset users and traders.
The sales arrangement is perceived as a way to return capital to Diem’s investors. Meta Platform Inc. (Facebook) owns about one-third of the company, while the remaining two-thirds are owned by a consortium of the company members.
From the beginning of Diem as a product, initially known by its former name, Libra, it was heavily criticized for its end goal of introducing a stablecoin to possibly billions of users, taking advantage of Facebook’s platform.
Meta Platform Inc. had announced the huge project as far back as June 2019 to the anger and heavy criticism of American politicians and financial regulators. The Diem association was created with giant FinTech companies like Stripe, PayPal, and Visa, as well as a host of some other leading companies in the world.
Political Paranoia
Policymakers expressed worries at the US capital within a month of the launch such that Mark Zuckerberg, Facebook’s CEO, was invited by Congress to explain how the project will not hamper finance globally. After finance to the Diem project was cut by some of its investors and increased pressure from regulators on Meta’s Novi crypto wallet, the development of the projects was stopped.
Whereas, David Marcus who was in charge of Libra from its inception as well as overseeing Novi’s development, had in December left Facebook for reasons that he needed time to build his own projects.
With global economies in constant instabilities, a lot of people are choosing to store their assets in cryptocurrencies and other digital means that they feel are more reliable. Hence, digital giants are increasing investments in, and launching their digital assets for people to invest in.
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