Facebook-backed digital currency Diem sold to bank

A once ambitious but now faltering Facebook-backed digital currency project known as Diem is dead, its assets sold to bank holding company Silvergate Capital.

Silvergate and the Diem Association announced the sale on Tuesday. Facebook owner Meta did not immediately respond to a post for comment.

Diem said it “became clear from our dialogue with federal regulators that the project could not proceed. As a result, the best course of action was to sell the assets of the Diem Group” and the project s will be completed in the coming weeks.

It’s been clear for some time that Diem, who first went by the name Libra, was fighting an uphill battle with regulators. Meta gradually distanced itself from the project.

Last May, the Diem Association, which at the time included Facebook and 25 other companies, entered into a partnership with Silvergate Capital Corp. to issue a “stablecoin” backed by the US dollar. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities.

Facebook announced the Libra project in 2019, envisioning it at the time as a stablecoin based on a basket of national currencies that could serve as a global currency for unbanked people around the world.

But the effort has been significantly scaled back amid regulatory and trade backlash. It changed its name in December 2020.