Diem Association, a company Facebook founded to manage its cryptocurrency initiative Libra, will sell its technology to crypto-focused bank Silvergate Capital for $200 million.
When Mark Zuckerberg announced the project, he said the cryptocurrency would serve as the foundation for payments across Facebook Messenger and WhatsApp. Zuckerberg convinced many companies to become founding members, backing the organization. Some include Visa, MasterCard, Uber, Lyft, eBay, Spotify, and Andreessen Horowitz.
The company planned to manage the technology via blockchain, with member organizations processing and verifying transactions. But within months, the association lost Visa, Mastercard, Stripe, and eBay.
David Marcus, the Meta executive who oversaw the launch, left the company last year.
Meta also ran into resistance in Washington when officials voiced concerns about how these plans would affect financial stability and data privacy.
Federal Reserve Chairman Jerome Powell said the central bank had serious concerns, and Zuckerberg stood before Congress, where he defended Facebook’s plan.
Silvergate Capital, the bank, had reached a deal with Diem to issue some of the stablecoins backed by hard dollars, designed to be less volatile than bitcoin and other digital currencies, according to The Wall Street Journal. The deal with Silvergate was part of a revamp last year that was intended to appease regulators.
Zuckerberg, apparently, wants to create his own world with a separate universe -- the metaverse -- and a currency to go along with it.
Libra was part of Zuckerberg's vision of bringing cryptocurrency to the masses.
Meta would have a universe where marketers could only buy advertising with cryptocurrency, and performance would rely on brands paying for every action their avatars took in this virtual world, tying it to real-world actions.
All these ideas have failed to materialize. Now the sale represents an effort to squeeze the remaining value from the defunct business.