In context: It feels like just about every company is trying to hop on board the cryptocurrency train, and Facebook was no different. Back in 2019, the social media giant unveiled "Libra," its own cryptocurrency that was intended to provide underserved people with access to a financial network powered by the blockchain.
Naturally, as with any big project Facebook unveils, the world was skeptical, to say the least. So skeptical, in fact, that many of Facebook's would-be financial partners (including PayPal, Mastercard, and others) dropped support for the crypto before it even got off the ground. It didn't help that Lawmakers were worried Facebook would have too much control over the crypto; given how widespread the social media company's reach is throughout the world.
The Libra Association was designed to combat those fears – it would've handed control over the crypto to a consortium of companies, including the ones mentioned above. However, as of now, Libra – which rebranded to Diem in 2021 – has been killed off for the time being. Or, more accurately, its assets have been sold to the Silvergate Capital Corporation, and Facebook's plans for Diem will likely never see the light of day.
This news comes directly from Diem's CEO, Stuart Levey, who published a lengthy statement discussing the Association's decision on Monday. As for concrete explanations, there aren't many to be found there. Levey merely notes that after an extended dialogue with federal regulators, it became clear that the project "could not move ahead," despite allegedly receiving high praise from an unnamed "senior" regulator.
That's bad news for Facebook's crypto ambitions, but it was clear from the start that Libra had the odds stacked against it. After losing support from several high-profile partners, it just didn't have the footing it needed to fully realize its potential.
Levey still remains hopeful that a crypto with a similar design to Diem could succeed in the long run. Indeed, he feels that, under Silvergate's leadership, the ideals and principles behind Diem can thrive. But only time will tell if his hopes are well-founded.