End of the day for Meta's Diem cryptocurrency: What you need to know

 Facebook's parent and its partners are getting out of the troubled cryptocurrency project.

It's the end of the day for Diem, Meta's troubled cryptocurrency. 

Facebook parent Meta and its partners in the Diem Association pulled the plug on the yet-to-launch cryptocurrency project amid growing resistance from regulators. The Diem Payment Network's intellectual property and other assets will be sold to Silvergate Capital Corp.

Bloomberg had earlier reported that the association, which oversees the digital currency, was considering a sale of the project in order to return capital to its members. 

Meta owns about a third of the project, according to Bloomberg, with the remainder in the hands of a variety of investors, including Uber, Shopify and Union Square Ventures.

The sale is hardly unexpected. Diem has been scaled back since it was first pitched as Libra in 2019 by Facebook as a global stablecoin. Like Facebook, the cryptocurrency rebranded, adopting the Diem name in December 2020 as concerns mounted. 

The project faced more trouble when David Marcus, one of the executives behind Meta's push into cryptocurrencies, said last year that he would leave the company to pursue entrepreneurial projects.

Diem hasn't gotten much love in its brief history. Partners have bolted from the project, details have shifted, and legislators have criticized the plans. Meta's launch of a cryptocurrency wallet called Novi prompted a backlash, with a group of five Democratic senators urging Meta CEO Mark Zuckerberg to stop the Diem project. 

Here's what you need to know about Facebook's ill-starred project. 

Why did Facebook want a cryptocurrency?  Diem wasn't actually Facebook's cryptocurrency. It was a project of the Diem Association, which Facebook originally co-founded as the Libra Association. The association would've served as its monetary authority. 

The project was designed to "empower billions of people," and organizers cited 1.7 billion adults without bank accounts who would've been able to use the currency.

Of course, Facebook had its own interest in digital cash, which predates Diem. The social network ran a virtual currency, called Credits, for about four years as a way to make payments on games played within Facebook. 

Zuckerberg has said sending money online should be as simple as sending photos. Diem was designed to make it easier and cheaper for people to transfer money online, which might also attract new users to the social network.

 Zuckerberg has acknowledged that having people use cryptocurrency would likely benefit Facebook by making advertising on the social network more desirable and, therefore, more expensive.

Meta's Novi subsidiary ran a wallet for holding and using the digital currency.

Would Facebook/Meta have had direct control over Diem?

No. Meta was one of the members of the Diem Association. (Meta's membership is through Novi.) The association had hoped to grow to 100 members, most of which would pony up $10 million. Each member had the same vote in the association, so Meta didn't technically have any more say over the association's decisions than any other member.

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