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Facebook’s Cryptocurrency Project Is Almost Certainly Coming To An End

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The Facebook-sponsored cryptocurrency formerly known as Libra appears to be coming to an end, more than two years after it was first announced. According to a new report, the Diem Association, which Facebook established to manage the digital token, is considering selling its assets after encountering resistance from regulators who opposed the initiative.

The US Federal Reserve “dealt the effort a final blow” by putting pressure on Silvergate, the banking partner with whom Diem announced a partnership last year to launch the token. I’ve also heard from a source close to the situation that the Fed threatened Silvergate, putting the launch on hold.

Michael Crittenden, a Diem Association spokesperson, told The Verge that Bloomberg’s story contained “some factual errors,” but declined to comment further.

If Diem is selling its assets, it could be an indication that the cryptocurrency is unable to find a way forward. Libra was originally intended to be a digital token backed by a basket of currencies from around the world, but regulators quickly put a stop to that plan. As a result, a simplified design was developed, with a rebranded Diem token pegged to the US dollar. That apparently wasn’t enough.

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Other recent indications suggest that Diem may not see the light of day. Facebook, which is now known as Meta, recently replaced the digital wallet it created for the Diem coin with another stablecoin from Paxos. And David Marcus, the executive who proposed Libra and led Meta’s digital wallet, left the company late last year after most of the project’s founding team defected.