Facebook has officially sold Diem. Who will continue Facebook's crypto path?

Meta（原 Facebook）旗下 Stablecoin 项目 Diem （原 Libra） 和 Silvergate 今天宣布 Silvergate Capital Corporation 将收购 Diem 支付网络的知识产权和其他资产，这些资产包括用于运行基于区块链的支付网络的开发、部署和运营基础设施和工具。根据 Silvergate 的一份声明，他们还将获得「对运行符合监管要求的稳定币网络至关重要的专有软件元素」。 

Libra, which Facebook had high hopes for, is on the verge of being sold.

As a stabecoin project that once attracted the attention of the world, Diem has had a rocky couple of years, from a vision to change the global payment system in the super social network ecosystem, to now it has to be sold. We really have to say goodbye to Diem.

Silvergate who is it?

Silvergate, who took over from Diem, has long had ties to cryptocurrencies. The name, which may be unfamiliar to most users, is an important partner for major U.S. cryptocurrency exchanges.

Alan Lane, CEO of Silvergate, a Fed member bank founded in 1988, saw a gap in the market when he bought his first bitcoin in 2013. Silvergate is dedicated to providing innovative financial infrastructure solutions for the digital currency industry.

Silvergate is best known for its 24/7 real-time payment platform, Silvergate Exchange Network (SEN), in addition to banking services. In the fourth quarter of 2021 alone, SEN processed more than $200 billion in transactions, with top institutions like Coinbase, FTX, Binance US, Circle, and Paxos among SEN's customers.

Even SBF of FTX also spoke highly of Silvergate. He said, "The time that an encryption company has gone through can be divided into pre-Silvergate stage and post-Silvergate stage. It is impossible to overstate how Silvergate has transformed the financial services of blockchain companies. SEN has proven day after day that it is one of the key pillars of the cryptocurrency settlement layer."

On May 12, 2021, when Diem Association announced that it was abandoning its plan to register with FINMA, the Swiss financial regulator, and returning to the US, it approached Silvergate and announced plans to work with Silvergate: Silvergate will be the exclusive issuer of Diem's DOLLAR stablecoin, Dime USD.

For Facebook, partnering with Silvergate, a bank that is both involved in crypto and a Fed member that is regulated by the Federal Reserve, is a good option for regulatory approval.

However, in November 2021, the U.S. President's Working Group on Financial Markets reported that cooperation between stable currency issuers and wallet providers or commercial companies could lead to excessive concentration of economic power, a combination that could adversely affect competition. They also worry that users of a stablesoin with which a giant tech company is heavily involved will face undue barriers and costs when switching to a new stablesoin.

So, Facebook can only choose the option of the checkout.

Diem replacement?

The loss of Diem doesn't mean that Facebook has completely abandoned the direction of digital currency. There is an option in hand -- Novi Wallet, formerly Calibra. As the name suggests, Calibra created the wallet specifically for Libra. Now, without Libra, the renamed Novi has completely abandoned its original DNA and continues to carry Facebook's payment dreams.

Despite the backlash over the data-abusing Facebook's digital wallet, Facebook has big hopes for Novi, with plans to make it available to people for all kinds of financial services and even buying customer service chatbot Servicefriend, In order to improve the quality of service.

At the same time, Novi began to seek partnerships with Circle and Paxos, the compliant staboin issuers, and considered using USDC or PAX as its staboin. Late last year, Facebook's WhatsApp began testing cryptocurrency transfers within its chat interface for some USERS in the United States using Novi Wallet.

For now, Novi seems to be Facebook's last option on the cryptocurrency circuit, and may help them revive their dream of crypto payments in the future of their All In Metasomes.

Ill-fated Diem

From the time the white paper came out in June 2019, any news about Libra has been hot. After all, Libra is the latest product of a super-social network with nearly 3 billion users, and the potential impact on users is enormous if it ever gets off the ground. Facebook's move into cryptocurrencies also provided a boost to the market during a bleak mid-2019 period. Four days after the launch of Libra, bitcoin topped $10,000 again after a gap of nearly a year. It then soared to its current peak of $14,000 that year, and its total market value soared from around $160 billion to $228 billion.

But Libra's debut was the pinnacle.

In the first edition of the white paper, Libra proposed a global payments network, in the form of a basket of fiat currencies, to become a payments giant.

Under this vision, investment institutions, blockchain, social media, communication companies, e-commerce, shared mobility, non-profit organizations, music, travel, payment and other fields of super giants, Diem partners include Visa, Uber, eBay, Spotify, Coinbase and many other well-known companies, and a super-giant alliance is shining in Silicon Valley.

Libra's partnership lineup when it launched

But while everyone was thinking Libra would change the payment landscape, regulators weren't impressed. They didn't approve of Facebook's ambitions and were worried about the impact Libra would have on the dollar, or even the United States, especially as Facebook has been branded an "Internet bully." Not so long ago, as the fallout from Facebook's data leaks and its use of data to manipulate elections continued, regulators were turning their noses up at the once-proud giant.

So in the four months since Libra's launch, Congress has held three hearings, including one in which Facebook founder Mark Zuckerberg had to sit in on the platform's strained relationship with regulators, to no avail. Although Zuckerberg has been honest about the KYC, user protection, and even the fact that Libra is a protection and enhancement of the U.S. dollar, regulators are not buying it. From the questions at the hearing, we can also see the anxiety of regulators. As a company with a history of data manipulation, who can trust you with the payment data of 3 billion people?

Under regulatory pressure, Paypal, eBay and other partners pulled out of the super alliance, and Libra was forced to amend its white paper, first introducing a single stablecoin anchor, then changing its name to Diem and anchoring only us dollars to maximize regulatory compliance. In the end, regulation failed Facebook.

While Diem is struggling to stay afloat, it released a statement saying what it's doing is still a "huge and great opportunity." However, according to insiders, Diem has long been a "zombie organization" in name only. Do they have no chance of success? Not at all, but very, very small, negligible.

In September 2020, Diem Associates Morgan Beller announced his departure; In March 2021, another Cofounder Kevin Weil announced his departure; At the end of 2021, David Marcus, who led the cryptocurrency project at Meta, Facebook's parent company, also left. The global regulatory clampdown has led to a retreat of the project leaders. The departure of veteran veterans has also dimmed Diem's prospects.

The sale of Diem to Silvergate shows that staboin-based payment systems are no longer a priority for Facebook, and that the metasomes are the latest tool in Facebook's efforts to turn the world around.

The global Stabler project, which lasted for two and a half years, has officially come to an end.

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