Silvergate Capital acquires Meta’s Diem stablecoin project.

Diem Association announced the sale of Silvergate Capital Corporation’s intellectual property and other assets related to the operation of the Meta-supported Diem payments network.

The financial terms of the deal were not disclosed. Earlier reports said the parties had agreed on the amount in the amount of $200 million.

“From the outset, the Diem project focused on using blockchain technology to develop a better and more inclusive payment system. We have pursued this mission, driven by a desire to deliver meaningful benefits to consumers and businesses, as well as provide a solution for those who are underserved or excluded from the traditional financial system,” the press release said.

The Diem Association noted that during development and testing, Diem established controls deemed innovative by regulators. Among these features is a prohibition on anonymous transactions.

According to the statement, the team actively engaged with supervisory authorities and received positive feedback on the Diem design. Nevertheless, it became clear from the dialogue that the project could not move forward:

“As a result, the best course of action was the sale of the Diem Group assets, which is what we did.”

The consortium expressed hope that Silvergate would continue to develop the payment network.

“We remain confident in the potential of a blockchain-based stablecoin like Diem to provide users with the advantages that motivated us from the start,” said Stuart Levey, CEO of Diem Networks US.

In the coming weeks, the Diem Association and its subsidiaries will begin the wind-down process.

Plans for Facebook (now Meta) to launch its own cryptocurrency became known in 2018.

In June 2019, the basket-backed Libra stablecoin project was officially announced with the publication of a white paper. At the same time, Facebook introduced the Calibra wallet. Earlier, the corporation’s eponymous division was led by former Coinbase board member and Facebook vice-president David Marcus.

To manage the payment network, Facebook created the nonprofit Libra Association. Among its members were Visa, Mastercard, PayPal, Uber, Spotify, Andreessen Horowitz, Coinbase and other well-known companies.

The Facebook cryptocurrency project drew regulators’ concerns, and in July 2019 hearings on it were held in the US Senate Banking Committee.

In October it emerged that payments firms Visa, Mastercard, PayPal and Stripe were slow to sign official participation documents in the Libra Association due to regulatory issues. Subsequently, they left the project.

In May 2020, Facebook rebranded the Libra wallet from Calibra to Novi and created a new operator for it. In December, the project behind the consortium renamed its name to the Diem Association.

Silvergate Bank was expected to become the issuer of Diem, but did not obtain approval from the U.S. Federal Reserve, according to Bloomberg.

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