Diem Association, formerly Libra Association, the stablecoin project started by Meta, which recently rebranded from Facebook, might soon cease to exist. A report unveiled this news earlier today, citing people familiar with the matter. Reportedly, the project is contemplating selling its intellectual property as well as other assets to return capital to the companies that joined it as investor members.
According to the report, Diem has already started discussions with investment bankers on the best way to sell its intellectual property. In so doing, it hopes to find a new home for the engineers that created the technology. Per the sources, which asked to remain anonymous because the discussions are not yet public, it is unclear how a potential buyer would value the project’s intellectual property.
Diem might not get a buyer
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While discussions are still in the early stages, the sources claim Diem is not guaranteed to find a buyer. One of the people disclosed that Meta owns the largest share of Diem, controlling almost 33% of the project. The rest of Diem’s assets belong to the association’s members, which comprise venture capital firms and technology companies.
Reportedly, these companies agreed to contribute a minimum of $10 million (£7.41 million) to become Diem’s founding members. However, the sources claim it is unclear which firms agreed to invest in Diem, apart from Meta.
The Diem Association comprises venture capital companies like Andreessen Horowitz, Union Square Ventures, Ribbit Capital, Thrive Capital, and Temasek Holdings Pte. The project’s website also lists firms like Coinbase, Spotify, Uber, Anchorage, and Paradigm, among others.
Mounting regulatory pressure
This move comes after the President’s Working Group on Financial Markets published a report in October last year unveiling its stance on stablecoins. The group of regulators agreed that stablecoin issuers should be regulated like banks if people use their coins as a means of payment.
According to the financial watchdogs, a massive network of a tech firm’s user base starting to transact in a new currency could result in an excessive concentration of economic power.
After the regulators made it clear how they intend to regulate stablecoin issuers, several executives, including David Marcus, left the project in the past year. Andreessen Horowitz took in two Novi Wallet lead engineers, perhaps hinting at what is to come for the stablecoin project, which has faced regulatory resistance since its inception.
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