According to rumours, Diem is looking for a buyer after failing to obtain regulatory approval.

It appears that Facebook's Diem is coming to an end before it even gets off the ground.

According to sources close to Bloomberg, the project is considering selling its assets in order to reimburse investors and redeploy its engineering workforce.

Since its announcement in the summer of 2019, Libra (Diem) has had the extraordinary effect of uniting both authorities and the crypto community in opposition to it.

Given that the Facebook group of companies has a combined user base in the billions, some saw the project as beneficial in terms of exposure. Taking this into consideration, the Winklevoss twins declared, "We need to be frenemies."

However, the Cambridge Analytica scandal erupted in the summer of 2019. The result was a $5 billion fine levied by the Federal Trade Commission for Facebook's role in violating consumer privacy.

While this isn't the first or even the last scandal involving the social media behemoth, Cambridge Analytica set the stage for anti-Facebook sentiment that persists to this day.

Accepting Libra (Diem) was always a big ask with that.

Facebook Diem was always a difficult sell.

As a global payment system backed by multiple assets and currencies, Facebook's Project Libra had lofty goals. Recognizing Facebook's negative connotations, the entity structure focused on attracting 100 equal founding members.

There was a strong emphasis on no single entity, including Facebook, having control over the project.

Initially, a slew of big names, including PayPal, Mastercard, Uber, and Visa, chipped in the $10 million founding member fee to join.

However, as the project gained traction, so did regulatory pressure. A hearing on Libra (Diem) was held by the United States Senate Committee on Banking, Housing, and Urban Affairs, and the discussions were not productive.

Senator Sherrod Brown set the tone for the hearing when he declared Facebook to be dangerous. He then discusses anti-competitive practises, behavioural algorithms, and "fake news."

"Through scandal after scandal, Facebook has demonstrated that it does not deserve our trust, and it should be treated as the profit-seeking corporation that it is."

Similar remarks were made by France's Finance Minister, Bruno Le Maire, who stated that such an entity threatens sovereignty and increases financial risk.

How the plot unravels

Facebook tried again, rebranding as Diem and scaling back its plans to offer a stablecoin backed by the US dollar.

Earlier this month, Zuckerberg clarified that Diem would not launch without first receiving regulatory approval in the United States. Before that, however, the cracks were beginning to show.

Former Diem Lead David Marcus announced his departure at the end of November 2021 to focus on other projects.

According to insiders, the Fed's opposition was the "final blow" for Diem, which is now attempting to recoup whatever assets it still has.

"The association reached an agreement with Silvergate Capital Corp. to issue Diem, but opposition from the US Federal Reserve dealt the effort a final blow, according to the people."

Support us!