The Diem Association, which oversees the development of the Diem digital currency, is considering the sale of its assets.
Mark Zuckerberg’s ambitious plan to build his own cryptocurrency is falling apart amid mounting pressure from regulators. A spokesperson for the Diem Association declined to comment.
Diem is now talking to investment bankers about next steps, including how to sell his intellectual property, in an effort to capture any remaining value. Sources say the company is also trying to find a new destination for the engineers who developed this technology.
Discussions are apparently still in the early stages and there is no guarantee that Diem will find a buyer. Even if they do, the report noted that it is unclear how they would define a value for the intellectual property of the project or the engineers who developed it.
One of the people who spoke to the press on condition of anonymity said Meta owns about a third of the venture, and the rest is owned by association members such as Andreessen Horowitz, Union Square Ventures and Ribbit Capital.
Zuckerberg’s beleaguered crypto project has been thwarted by drama since it was first announced in June 2019.
At the time, cryptocurrency called Libra, and was initially conceived as a stablecoin, which is a specific subset of cryptocurrencies that have a value pegged to a real-world asset, such as a fiat currency like the US dollar or a commodity like gold.
In the case of Zuckerberg’s stablecoin, the initial plan was to launch a universal currency linked to a basket of major currencies and government debt.
The project was immediately met with hostility by central bankers and politicians, who feared it could facilitate nefarious activities such as money laundering and breaches of privacy, as well as proving a formidable rival to sovereign currencies like the US dollar.
In the wake of the regulatory backlash, the embattled project swung to the concept of launching multiple stablecoins, each of which would be pegged to a fiat currency in addition to a multi-currency currency.
Ultimately, the vision for the cryptocurrency was narrowed to a US dollar-backed stablecoin known as Diem USD.
The project itself also followed a somewhat convoluted chain of ownership and experienced an exodus of corporate partners and high-profile executives.
It has also already had the support of several partners, but as the head of Meta went to Capitol Hill to defend the project, key supporters such as Visa, Mastercard and PayPal abandoned the project. In November of last year, David Marcus, head of Meta’s cryptocurrency efforts, announced that he would also be leaving.