The dream of creating a global cryptocurrency for Facebook or Meta as it is now known will not become a reality. Facebook’s cryptocurrency, called Libra and later renamed Diem, was sold to Silvergate Capital for $182 million, which includes intellectual property and other assets.
Facebook Crypto Appears Over Before It Started
When Facebook announced its cryptocurrency Libra in 2019, the company was dealing with the fallout from Cambridge Analytica as well as other issues such as collecting call and SMS data. So, regulators, lawmakers, and financial industry watchdogs had some concerns about Libra.
But lost in the hysteria of the moment was that Libra was a stablecoin attached to the dollar. This meant it would not have the wild fluctuations of the regular cryptocurrencies. Nevertheless, the company couldn’t overcome the negative press, thus 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.”
If properly implemented Diem would’ve provided invaluable service to businesses, underbanked people, and communities around the world. As Levey added in the release, the goal 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 have to come up with a currency it can use freely around the world and in its Metaverse. We will have to wait and see how the company navigates the regulators and consumer acceptance for its next iteration of its cryptocurrency.
What are Stablecoins
The goal of stablecoins is to provide price stability by backing their coins to a reserve asset. This can be anything from the U.S. dollar to a commodity price such as gold. The need for stablecoins is important in a digital ecosystem. This is because people and businesses that just want to carry out transactions using the instant processing, security, and privacy of cryptocurrency technology can do so without worrying about the volatility.
As more people become aware of stablecoins, small businesses and individuals will start using it to securely pay or receive funds. And with short-term volatility out of the way, it will be just like sending any other currency.
This article, “Facebook Crypto Appears Over Before It Started” was first published on Small Business Trends