Diem Association, which is sponsored by Meta Platforms Inc (FB.O), said on Monday that it had sold its assets to crypto-focused bank Silvergate Capital Corp (SI.N), putting a stop to the tech giant’s ambitious plan to convince its billions of users to transact in its own currency.
Silvergate paid $182 million for Diem’s intellectual property and other assets, according to a separate statement. The sale marked the end of a long fight for Meta’s fintech section, which had lost most of its leadership, including director David Marcus, in the fall as a result of a worker exodus.
It also throws into question how Meta plans to handle commerce in the metaverse, a futuristic digital environment that Chief Executive Mark Zuckerberg has heralded as “the successor to the mobile internet.”
Although visions for the metaverse differ, many early projects involve transactions for digital goods and services using cryptocurrencies.
When the Diem project was first announced in 2019, it was formerly dubbed Libra. Regulators were afraid that it would give Facebook too much power over the money system and infringe on users’ privacy.
In order to gain regulatory approval, Facebook renamed the digital coin and the wallet it was developing to execute transactions, both of which are now known as Novi.
Along the way, it significantly scaled back plans, transferring Diem’s operations from Switzerland to the United States and setting the goal of creating a dollar-pegged US stable coin. For the time being, Meta is putting Novi to the test in Guatemala and the United States, using the stable coin Pax Dollar, despite continued opposition from a group of US senators who claim Meta cannot be trusted with cryptocurrency.
On Wednesday, Meta will release its fourth-quarter earnings, and for the first time, it will break outperformance for its metaverse-oriented hardware unit.
