Facebook's doomed cryptocurrency effort is almost certainly coming to an end

January 26, 2022 | 09:04am

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The Facebook-sponsored cryptocurrency formerly known as Libra looks to be coming to an end, more than two years after it was initially unveiled. The Diem Association, which Facebook established to oversee the digital token, is considering selling its assets after encountering opposition from authorities who rejected the plan, according to a new report by Bloomberg.

According to Bloomberg, the US Federal Reserve "dealt the attempt a last blow" by placing pressure on Silvergate, the financial partner with whom Diem announced a partnership last year to launch the coin. 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 spokeswoman, told The Verge that Bloomberg's piece featured "some factual mistakes," but declined to comment more.

If Diem is selling its assets, it might be a hint that the cryptocurrency is unable to find a route ahead. Libra was originally intended to be a digital token backed by a basket of currencies from around the globe, but authorities swiftly put a stop to that plan. As a result, a streamlined design was developed, with a renamed Diem token pegged to the US dollar. That apparently wasn't enough.

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 CEO who invented Libra and oversaw Meta's digital wallet, departed the business late last year when most of the project's initial staff defected.