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27-01-2022|Crypto

Diem to Sell Assets to Silvergate Bank for $200 Million : Report.

The star-crossed project had been in discussions with investment bankers about selling its core assets and return money to investors.

The Diem Association, a Meta Platforms-led venture that was planning to launch a new, user-friendly stablecoin, is selling its technology to Silvergate Capital for $200 million, according to The Wall Street Journal, which cited an unknown source.

  • Last year, the California bank that supports blockchain startups agreed to collaborate with Diem on the creation of a US dollar-pegged stablecoin. The deal was expected to breathe new life into a dormant project that Meta Platforms had launched under the name Libra in 2019 when Facebook was still known as Facebook.
  • Bloomberg reported on Tuesday that Diem was in talks with investment bankers to sell its intellectual property in order to refund money to investors.
  • Originally known as Libra, the project envisioned a stablecoin backed by a basket of fiat currencies that could be used as a medium of exchange over the world. However, it sparked an international regulatory response, with politicians asking that all development be halted until they could offer regulatory direction and ensure that financial stability was not jeopardised.
  • The Libra Association renamed as Diem in December 2020 to try a new approach, but the venture continued to face challenges, including the resignation of senior executives.
  • Silvergate would be the formal issuer of the diem USD stablecoin and maintain the reserve supporting the token, while Diem Networks U.S. would administer the Diem Payments Network and register as a money services business with the Financial Crimes Enforcement Network (FinCEN).
  • The Federal Reserve, on the other hand, raised reservations about the idea and said it couldn't promise that it would be approved
  • Last November, lawmakers fought back against Novi (previously Calibra), a Meta subsidiary aimed on developing a Diem-compatible wallet, which announced a trial programme in conjunction with Paxos.

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