The Facebook-sponsored cryptocurrency, Diem is ceasing to exist due to regulatory pressure. The cryptocurrency announced two years back, formerly known as Libra, is considering selling its assets after encountering regulatory opposition.
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Diem is ceasing to exist due to clash with Feds
The Diem Association — a crypto project backed by the parent company Meta — planned to issue a stablecoin that would have been pegged to the US dollar. Meanwhile, backers of the stable coins said that they have the potential to transform global finance by offering the seamless transaction speeds of cryptocurrencies without the price volatility of bitcoin or ethereum. From the moment Meta and its partners unveiled plans for a stablecoin, the idea met resistance from regulators who expressed concern about letting a scandalous company control a good chunk of the global financial system.
There are some major signs which make it evident that Diem is ceasing to exist, such as; Meta launching the digital wallet – originally built for the Diem coin – with another stablecoin, Paxos. David Marcus, the executive who originally proposed Libra and led Meta’s digital wallet, left the company late last year. It is also highly likely that stablecoins like Libra/Diem could create systemic risks to the economy, making companies like Meta and its partners too big to fail.
Why has the project failed?
Mark Zuckerberg didn’t expect a whole political backlash that Facebook as a company started getting from all over the world. In localized areas around the world, the platform was being used to promote right-wing specific agendas with Facebook accepting advertising money from political parties. This brought much political opposition, financial fears and many allies to abandon the project due to the bad press. All sorts of regulatory blockades were put in place against Facebook, hence, rendering any project linked to them as a failure.
Source: Verge
