Meta, formerly Facebook, is in advanced discussions with investment bankers to sell assets tied to its cryptocurrency project Diem, originally known as Libra, according to a Bloomberg report published Tuesday, citing sources familiar with the matter. The company is seeking buyers for intellectual property and a new home for the project's engineers, signaling a major retreat from its ambitious foray into digital currencies.
Meta Holds One-Third Stake; Diem Association Explores Sale
Sources disclosed that Meta owns approximately one-third of the venture, with the remainder held by other members of the Diem Association. The association is now considering a sale of its assets as a means to return capital to its investor members. Investment bankers have been engaged to explore the sale of the project's intellectual property and to secure a new environment for the engineering team. The move comes after persistent regulatory headwinds that have plagued the project since its inception in June 2019 as Libra. Key partners such as Visa, Mastercard, and PayPal withdrew early on, and the project's leader, David Marcus, resigned at the end of 2021.
Regulatory Hurdles with Silvergate Bank Derail Stablecoin Plan
A central factor in the decision is the failed partnership with Silvergate Bank. In May 2021, Diem announced the bank would serve as the exclusive issuer of the Diem USD stablecoin. However, sources said the bank's regulator expressed unease with the launch plan and could not assure Silvergate that the activity would be permitted. This regulatory uncertainty effectively blocked the stablecoin rollout, which was a cornerstone of the project. Without a clear path to regulatory approval, the Diem Association has concluded that selling assets is the most viable option to return capital to investors.
Strategic Retreat from Crypto Ambitions
The sale of Diem assets marks a significant strategic retreat for Meta under CEO Mark Zuckerberg. From the initial high-profile Libra announcement to the rebranding as Diem, the project faced relentless skepticism from regulators worldwide. The decision to sell underscores the difficulty of launching a global cryptocurrency in the face of regulatory fragmentation and institutional pushback. While the identities of potential buyers remain unknown, the Diem Association hopes to maximize returns for its members while winding down the project. The fate of the Diem technology and its team will depend on the buyer's intentions, but the sale signals the end of Meta's direct involvement in the stablecoin ecosystem—at least for now.