2 years ago
The Diem Association, the Meta Platforms-led endeavor that was looking to contented a new, idiosyncratic affable stablecoin, is selling its exertion to Silvergate Capital for $200 million, The Wall Street Journal reported, citing an unnamed source.
The California bank, which serves blockchain companies, had already agreed past twelvemonth to spouse with Diem successful launching a U.S. dollar-pegged stablecoin. The statement was expected to enactment caller aerial into a struggling project, which Meta Platforms had kickstarted nether the sanction Libra successful 2019 erstwhile the institution was inactive called Facebook.
Diem was successful discussions with concern bankers to merchantability its intelligence spot to instrumentality wealth to investors, Bloomberg reported connected Tuesday, citing unnamed sources.
As Libra, the task primitively envisioned a stablecoin backed by a handbasket of fiat currencies that could beryllium utilized worldwide arsenic a means of exchange. But it instantly spurred planetary regulatory backlash, with lawmakers demanding that each improvement cease until they could supply immoderate regulatory guidance and guarantee that it didn't endanger fiscal stability.
In December 2020, the Libra Association rebranded arsenic Diem to effort a antithetic approach, but the inaugural continued facing headwinds, including the departure of cardinal executives.
Diem Networks U.S., a portion of the association, would tally the Diem Payments Network and registry arsenic a wealth services concern with the Financial Crimes Enforcement Network (FinCEN), portion Silvergate would beryllium the ceremonial issuer of the diem USD stablecoin and negociate the reserve backing the token.
But the Federal Reserve expressed concerns astir this program and wouldn't warrant that it would springiness its approval.
Lawmakers besides pushed backmost against Novi (formerly Calibra), a Meta subsidiary focused connected gathering a wallet that would beryllium compatible with Diem, announced a aviator programme successful concern with Paxos past autumn.
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James Rubin is CoinDesk's U.S. quality exertion based connected the West Coast.
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