The ambition of developing a global cryptocurrency for Facebook, or Meta as it is currently called, will not come true. The Libra cryptocurrency, which was later renamed Diem, was sold to Silvergate Capital for $182 million, including intellectual property and other assets.
Before It Began, Facebook Crypto Appeared
When Facebook announced its cryptocurrency Libra in 2019, it was still dealing with the fallout from Cambridge Analytica, as well as other issues like collecting call and SMS data. As a result, regulators, legislators, and financial industry watchdogs were concerned about Libra.
But, lost in the frenzy of the moment, was the fact that Libra was a stablecoin tied to the dollar. This meant that it would not experience the wild fluctuations that other cryptocurrencies do. Nonetheless, the company was unable to overcome the negative press, leading to the sale.
In a statement, Diem Networks US (“Diem”) CEO Stuart Levey, said,
“Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead. As a result, the best path forward was to sell the Diem Group’s assets, as we have done today to Silvergate.”
Diem, if properly implemented, would have provided an invaluable service to businesses, underbanked individuals, and communities all over the world. The goal, as Levey stated in the release, was to,
“… deliver substantial benefits to consumers and businesses, along with a payments solution for those who are currently underserved or excluded altogether from the traditional financial system.”
Meta will need to devise money that it can freely utilize around the planet and in its Metaverse. For the next edition of its cryptocurrency, we’ll have to wait and watch how the corporation deals with authorities and consumer approval.
What are Stablecoins and How Do They Work?
Stablecoins’ purpose is to maintain price stability by tying their coins to a reserve asset. This might be anything from the US dollar to the price of a commodity like gold. In a digital environment, the necessity for stablecoins is critical. This is because individuals and organizations who just want to conduct transactions using bitcoin technology’s quick processing, security, and privacy can do so without fear of volatility.
Small businesses and individuals will begin to use stablecoins to safely send and receive cash as more people become aware of them. And, after the short-term volatility is gone, it will be as simple as sending any other currency.
Learn more from business and read How to Spot a Fake Cryptocurrency Exchange.
